Russia’s Gas Ambitions Shift Eastward
As the European energy landscape undergoes a significant transformation, Russia is setting its sights on new markets. In a recent joint press conference with Iranian President Masoud Pezeshkian, Russian President Vladimir Putin revealed plans to supply up to 55 billion cubic meters (bcm) of gas to Iran annually.
A Shift Away from Europe
The move marks a significant departure from Russia’s traditional reliance on European markets. Since the Ukraine conflict began in 2022, Gazprom, Russia’s state-owned gas giant, has seen its dominant position in the European gas market dwindle. The company’s exports to Europe via Ukraine came to a halt this month, ending a decades-long reliance on Soviet-era pipelines.
New Opportunities in Iran
Iran, despite boasting the world’s second-largest gas reserves, still imports gas due to under-investment partly attributed to US sanctions. Russia sees an opportunity to capitalize on this demand, with Putin stating that the goal is to reach 55bcm of gas exports to Iran per year. The initiative will commence with smaller volumes, starting at up to 2bcm, with the potential to scale up in the future.
A Memorandum of Understanding
In June 2024, Gazprom signed a memorandum with the National Iranian Gas Company to facilitate the supply of Russian pipeline gas to Iran. While the potential pipeline routes were not disclosed, the agreement marks a significant step towards realizing Russia’s gas ambitions in the region.
A New Era in Energy Cooperation
The proposed gas exports to Iran are comparable to what the Nord Stream 1 undersea gas pipelines delivered to Europe before being damaged in 2022. As EU buyers, including those in Slovakia and Austria, look for alternative sources of gas, Russia is poised to become a major player in the Iranian energy market. With its vast gas reserves and strategic location, Iran is an attractive partner for Russia as it seeks to diversify its energy exports.
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