Iran, Russia To Dominate World’s Gas Prices

By Stefan J. Bos, Chief International Correspondent

TEHRAN/MOSCOW (Worthy News) – Iran and Russia have agreed on a deal that would enable the two countries to dominate the world market for natural gas and set the prices.

The National Iranian Oil Company (NIOC) and Russian natural gas producer Gazprom signed a memorandum of understanding worth around $40 billion, Iran’s oil ministry says.

The deal was agreed upon in recent weeks at an online ceremony by the CEOs of both companies, Worthy News monitored.

They inked the agreement on the day that Russian President Vladimir Putin arrived in Iran’s capital Tehran for a summit with his Iranian and Turkish counterparts.

Iran sits on the world’s second-largest natural gas reserves after Russia, but U.S. sanctions have hindered access to technology and slowed the development of exports.

Under the agreement, Gazprom will help NIOC in the development of the Kish and North Pars gas fields and also six oil fields.

GAZPROM INVOLVED

Gazprom will also be involved in the completion of liquefied natural gas (LNG) projects and the construction of gas export pipelines.

As of 2019, with sales over $120 billion, representing twelve percent of global natural gas output, Gazprom was ranked as the world’s largest publicly listed natural gas company. It is also the most prominent firm in Russia by revenue.

The Iranian Petroleum Ministry says Iran’s proven natural gas reserves represent about 17.8 percent of the world’s total reserves, the world’s second-largest reserves after Russia.

And Iran still has enormous potential for new significant natural gas discoveries, according to industry experts.

The cooperation between Moscow and Tehran is part of an emerging anti-American alliance among countries suffering Western sanctions.

Their impact is due to increase as the use of natural gas is on the rise. “Gas is widely seen as the optimal product in transitioning from fossil fuels to renewable energy. So controlling as much of the global flow of that will be the key to energy-based power over the next ten to twenty years,” stressed Hamid Hosseini, chairman of Iran’s Oil, Gas, and Petrochemical Products Exporters’ Union, in Tehran.

WORLD CONCERNS

The Iranian-Russian natural gas agreements are closely watched as Moscow’s invasion of Ukraine reconfigured the global oil and gas market. It pushed energy prices too high levels contributing to higher living costs and rising consumer inflation.

Isolated from Western nations by sanctions, Russian President Vladimir Putin has turned to other countries in a similar situation. That’s why his July 19 visit was focused on meeting Iran’s Supreme Leader Ayatollah Ali Khamenei and Turkey’s President Recep Tayyip Erdoğan.

In addition to the natural gas deal, Putin acquired drones for use in Ukraine from Iran. Intelligence organizations in several countries suggested that, in return, Russia would help facilitate an Iranian nuclear weapons program.

As Putin said at the “Army-2022” international military conference, “[We] are ready to offer our allies the most modern types of weapons.” Soon after, he met Belarus’ President Alexander Lukashenko, who said that his military’s SU-24 warplanes had been modified to carry nuclear weapons.

Lukashenko warned that he would not hesitate to use them if the Western nations interfered with Russia’s war in Ukraine. With the new natural gas deal, Russia has a powerful interest in a strong, even nuclear-armed, Iran.

Israel has expressed concern about what it views as Iran’s aggressive policy of regional expansionism with its nuclear prospect deemed “deeply concerning.”

Tehran has called Israel “little Satan” as tensions mount across the region.

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