Russia and Iran strengthen ties with major gas agreement
Russia and Iran have signed an agreement for the supply of 1,943 billion cubic feet of gas annually and financial support for a new nuclear power plant. This is another step in strengthening cooperation between these countries, which are subject to Western sanctions.
what do you need to know?
- Russia and Iran have signed an agreement for the supply of 1,943 billion cubic feet of gas annually. The agreement was announced during the visit of Iranian Oil Minister Mohsen Paknejad in Moscow.
- Russia has committed to financing the construction of a new Iranian nuclear power plant. This is another step in strengthening economic cooperation between these countries.
- Iran, despite having large gas reserves, imports the fuel due to a collapse of its extraction industry. Western sanctions have significantly affected the Iranian energy sector.
what are the details of the gas agreement?
During his visit to Moscow, Iranian Oil Minister Mohsen Paknejad announced the signing of an agreement for the supply of 1,943 billion cubic feet of natural gas annually from Russia.
1,943 billion cubic feet of gas annually is roughly equivalent to the current capacity of the decommissioned Nord Stream 1 pipeline from Russia to Germany. Following the outbreak of the war in Ukraine, Russian oil and gas exports to Europe have sharply decreased.
The meeting with Russian Energy Minister Sergey Tsivilev also resulted in the declaration that in 2025, Russia will supply Iran with 64 billion cubic feet of gas. However, the delivery price was not disclosed.
Why does Iran import gas despite having large reserves?
Iran has the second-largest gas reserves in the world, after Russia. Despite this, the country is forced to import gas due to the collapse of its extraction industry, which is a result of Western sanctions. Russia, as part of strengthened cooperation, has committed to financing the construction of a new nuclear power plant in Iran.
What are the further cooperation plans between Russia and Iran?
In addition to the gas agreement, Paknejad announced plans to sign contracts with Russian companies for the exploitation of seven Iranian oil fields worth $4 billion CAD. The cooperation is also expected to include agriculture and banking.
Russia imports, among other things, drones from Iran used in attacks on Ukraine. In January, Vladimir Putin hosted President Masoud Pezeshkian at the Kremlin and signed a strategic partnership agreement with him.
Simultaneously, the USA under President Donald Trump is aiming to further isolate Iran and strengthen the sanctions regime. Trump also expresses the desire to reach a nuclear agreement with Tehran that would limit Iran’s nuclear program and ensure that it does not obtain nuclear weapons. The third round of negotiations on this topic is scheduled to take place on Saturday in Oman. Representatives of both sides have positively assessed the outcomes of the previous talks in Oman and Italy.
