Iran is in talks to sell its excess oil to Egypt, the Wall Street Journal reported Monday, as the country's stockpiles continue to grow due to Western embargoes.

According to the report, Tehran approached Cairo to sell two million barrels of oil, worth over $200 million, and that negotiations over the deal are ongoing. "Between Iran and Egypt, there is some discussion," the Journal quoted an unnamed official in Tehran as saying. "There is the idea they [will] import some oil from Iran."

Diplomatic relations between Cairo and Tehran broke down immediately after Iran's revolution due to Egypt's support for the overthrown Shah and its peace agreement with Israel. However, the relationship could be thawing after Egyptian President Mohamad Morsy visited Tehran last month for the Non-Aligned Movement conference, marking the first such visit by an Egyptian leader since Iran's Islamic revolution in 1979.

Last week, Iranian President Mahmoud Ahmadinejad admitted that Iran is having problems selling its oil, the latest high-level confession that Western economic sanctions are taking their toll on the Iranian economy. The Iranian president, however, expressed confidence his country would continue to survive the Western attempts against it. "We have oil and the world needs it," he said.

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Sanctions have slashed Iran's oil exports, which in normal times accounted for nearly four-fifths of its total exports and two-thirds of government revenues. In June, Tehran admitted its oil exports had shrunk between 20 and 30 percent.

Iran's currency, the rial, plunged to an all-time low on Monday as Western nations sought to further isolate the country economically and diplomatically. Last week, the foreign ministers of Britain, France and Germany urged fellow EU member states to ratchet up sanctions against Iran. The bloc imposed a total ban on purchases of Iranian crude at the beginning of July.

Reuters contributed to this report

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