Sanctions-battered Iran is projecting its energy resources as a possible alternative to Europe amid major cuts in Russian gas supplies to the continent in the wake of the Ukraine war.
On Monday, Foreign Ministry spokesman Nasser Kanaani said Tehran could provide a ‘bigger part’ of Europe’s energy needs if the nuclear talks conclude and sanctions are lifted.
The statements came as the energy crunch facing many European countries spirals into a deepening economic crisis ahead of the cold winter, especially with no gas flowing through Nord Stream 1.
A day after Kanaani’s remarks, Iranian Oil Minister Javad Ojhi also made a strong case for his country’s energy resources, saying Tehran is ready to supply its oil and boost energy security in the world.
Speaking to reporters on the sidelines of the 32nd OPEC ministerial meeting, Ojhi said Iran’s supply of energy resources, including oil, gas, and petroleum products, has assumed added importance in the wake of Europe’s energy crunch ahead of the cold winter.
Russia until recently contributed to a major chunk of Europe’s import of crude oil, natural gas, and solid fossil fuels. The Ukraine war, now in its seventh month, disrupted that partnership.
‘The raging war in Ukraine has exacerbated energy and economic crisis in Europe and changed the trajectory of energy politics between the two sides,’ energy expert Ehsan Hedayati told Anadolu Agency.
‘That has opened a window for Iran to supply its energy to Europe at a time when talks to revive the 2015 nuclear deal have entered the last stretch.’
Hedayati, however, noted that supplying gas to the European countries to help them see through the difficult winter ‘is easier said than done.”
– ‘Winter is coming’
The top adviser and de facto spokesperson for Iran’s nuclear negotiating team, Seyed Mohammad Marandi, has repeatedly raised the issue of the energy crunch in Europe in recent weeks, linking it to the nuclear talks.
“Iran will be patient. The US under (Barack) Obama systematically violated the (nuclear) deal and under (Donald) Trump/(Joe) Biden imposed maximum pressure against innocent citizens,’ Marandi wrote in a series of tweets on September 3.
‘Winter is coming and the EU is facing a crippling energy crisis,’ he added, suggesting that Iran could help resolve the crisis.
He said ‘some EU governments’ have asked Iran for oil and natural gas, but Biden is ‘fearful that foes will depict him and certain allies as weak.’
Whether Iran will be able to meet Europe’s burgeoning gas needs ahead of the difficult winter is debatable, experts believe, given that Iran needs most of it for domestic consumption and lacks pipelines to Europe.
Ali Ahmadi, geo-economics expert and executive fellow at Geneva Center for Security Policy, said Iran has ‘a sizable capacity’ for oil exports and its oil coming back to global markets could ‘certainly reduce the price of oil decent margin,” but Europe’s economy is ‘heavily gas-dependent.”
‘Unlike oil, gas is not as much of a global commodity because it is a gas rather than a liquid and therefore harder to transport,’ Ahmadi told Anadolu Agency.
‘It can be converted into LNG but that is an expensive and high-investment proposition. Iran currently does not have the capacity to export large amounts of gas,’ he said.
– Nuclear deal
Ahmadi said Iran’s export capacity has been ‘hampered by US sanctions that undermine the upstream process,” as well as by ‘intense domestic consumption.’
‘It also doesn’t have the infrastructure needed for significant gas exports to Europe at this time,’ he noted.
Nersi Ghorban, an energy expert and economic analyst, said Iran as a “major owner of gas reserves” can supply it to Europe, but such exports are economically viable “if gas prices remain high for a relatively long period.”
“Even if such exports are profitable enough, building a pipeline taking Iran’s gas to Europe takes five to six years and needs billions of dollars in investment to be completed,” Ghorban told Anadolu Agency.
He added that Iran cannot sign such long-term contracts with European nations given “chronic tensions in its relations with the West,” tying its prospects with the ongoing nuclear talks.
The talks to salvage the 2015 nuclear deal, underway since April last year, are in the final stretch but Tehran and Washington continue to disagree over key sticking points, delaying the agreement.