top of page

Iran's Role in Resolving Europe's Gas Crisis

Iran, known for possessing 17 percent of the world's proven natural gas reserves, has become a significant player in addressing Europe's energy challenges.

With Russia's gas flow to Europe significantly reduced due to the NATO war in Ukraine and political pressures imposed by the United States, European nations are seeking alternative sources of natural gas. European countries, lacking direct pipeline connections with Iran due to fears of US sanctions, have turned to Azerbaijan for gas supplies via the Caspian Sea.

However, Azerbaijan's limited resources and technical capabilities make it an inadequate long-term solution. As a result, gas transit between Turkmenistan, Iran, and Azerbaijan is expected to increase by 70% this year. The natural gas swap deal was concluded in November 2021. In mid-2022, Iranian oil minister Javad Owji announced the three partners had agreed to double the gas swaps volume.

CEO of the National Iranian Gas Company (NIGC), Deputy Minister of Oil and Gas Industry of Iran Majid Chegeni, said that Iran registered a 358% growth in the volume of swap gas supplies from Turkmenistan to Azerbaijan in the previous 1401 Iranian calendar year (ended on 20 March 2023) adding that in 2022, in value terms, gas supplies transported under swap operations increased by 530% year-on-year. NIGC imports natural gas from Turkmenistan as part of a swap deal signed with the Azerbaijani company SOCAR in 2021.

Iran, seizing this chance, is pushing forward with plans to expand its gas transit infrastructure, aiming to enhance its capacity for gas transit among its neighboring countries. The completion of the Rasht-Chelavand gas pipeline is imminent, allowing Iranian gas supplies to Azerbaijan to reach 5.5 billion cubic meters annually. Moreover, negotiations are underway for a new gas import agreement with Turkmenistan, potentially providing up to 10 billion cubic meters per year.

The National Iranian Gas Company (NIGC) began constructing the Rasht-Chelavand gas pipeline in 2019 to expand its gas transfer network in colder regions in Iran's north. However, the project accelerated in November 2022 after Iran signed a significant deal with Turkmenistan to swap gas for delivery to Azerbaijan.

This agreement's initial phase will enable Azerbaijani gas exports to Europe to reach 11.5 billion cubic meters this year, accounting for half of the 20 billion cubic meters of gas Europe requires through the Southern Gas Corridor. In July last year,Baku signed a memorandum of understanding with the EU to double the volume of gas it sends to Europe through the Southern Gas Corridor to an annual 20 billion cubic meters by 2027 to help compensate for the loss of Russian gas.

Europe's adherence to US sanctions on Iran limits its options for meeting its gas requirements, leaving it with fewer alternatives. In this context, one of the available choices is to rely indirectly on Iran to address its energy needs. With substantial proven natural gas reserves and a willingness to engage in gas swaps and expand transit infrastructure, Iran can be considered as a potential partner for Europe's energy security.

In light of the USA's turning a blind eye to Iran's sanctions violations, particularly about the oil trade, and its intention to reach an agreement with Iran in the nuclear field, the possibility of collaboration between Tehran and Europe is further strengthened.


Rated 0 out of 5 stars.
No ratings yet

Add a rating
bottom of page