Russia and Iran bolster ties with major gas and nuclear deals
Russia and Iran have signed an agreement for the supply of 1,943 billion cubic feet of gas annually, alongside financial support for a new nuclear power plant. This marks another step in strengthening cooperation between these nations, both of which face Western sanctions.
What do you need to know?
- Russia and Iran have signed an agreement for the annual supply of 1,943 billion cubic feet of gas. This agreement was announced during Iranian Oil Minister Mohsen Paknejad's visit to Moscow.
- Russia has committed to financing the construction of a new Iranian nuclear power plant. This move further strengthens the economic ties between the two countries.
- Despite its large gas reserves, Iran imports fuel due to a collapse in its extraction industry. Western sanctions have heavily impacted the Iranian energy sector.
What are the details of the gas agreement?
During his Moscow visit, Iranian Oil Minister Mohsen Paknejad announced the signing of an agreement for the annual supply of 1,943 billion cubic feet of natural gas from Russia.
This gas volume compares with the capacity of the now-decommissioned Nord Stream 1 pipeline, which used to transport gas from Russia to Germany. In the aftermath of the Ukrainian conflict, Russian oil and gas exports to Europe have sharply decreased.
The meeting with Russian Energy Minister Sergey Tsivilev also resulted in a declaration that in 2025, Russia will supply Iran with 64 billion cubic feet of gas. However, the price of this delivery was not disclosed.
Why does Iran import gas despite having large reserves?
Iran possesses the world's second-largest gas reserves, following Russia. Despite this, the country is compelled to import gas due to the collapse of its extraction industry, a consequence of Western sanctions. As part of enhanced cooperation, Russia has committed to financing the construction of a new nuclear power plant in Iran.
What are the further cooperation plans between Russia and Iran?
Besides the gas agreement, Paknejad announced plans to sign contracts with Russian companies for the exploitation of seven Iranian oil fields, with a total value of $4 billion (3,5€ billion). The cooperation is also expected to extend to agriculture and banking.
Russia imports drones from Iran, used in attacks on Ukraine. In January, Vladimir Putin hosted President Masoud Pezeshkian at the Kremlin, where they signed a strategic partnership agreement.
Meanwhile, the USA, under President Donald Trump, aims to further isolate Iran and bolster the sanctions regime. Trump concurrently expresses a desire to reach a nuclear agreement with Tehran that would limit Iran's nuclear programme and prevent it from acquiring nuclear weapons. The third round of negotiations on this issue is scheduled for Saturday in Oman. Representatives from both sides have positively assessed the outcomes of previous talks in Oman and Italy.
