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Russia and Iran: Competition in the Global Gas Markets?

20.05.2015

MOSCOW, MAY 20, 2015. PIR-PRESS – “In the changing conditions of the development of natural gas markets, Russia and Iran are playing on the same field. The changes that are taking place in Iran’s oil and gas sector have impact on the exporting potential of the country and will inevitably influence the potential Russian participation in international natural gas markets. We are also likely to see new competition in the international organizations. The future of competition between Russia and Iran may depend on the following factors: first, Iran’s conscious decision to enter markets that Russia is seeking (mostly non-European), and secondly, the prospect of coordinated actions within the framework of existing institutions in gas markets”, – Research Assistant of the Institute of Energy Research of the Russian Academy of Sciences, Irina Mironova.

“Both Russia and Iran are in rather similar geopolitical conditions. Over the recent years, the trend towards consolidation and liberalization of regional natural gas markets has been sustaining, though to different extents for the two countries. The role of arbitragist (a supplier able to provide supply to several regional markets simultaneously and redirect commodity flows thereby transforming supply and demand balance and receiving maximum profit depending on price levels) might be crucial in this situation. So both countries could count on this role in observable future,” – comments Research Assistant of the Institute of Energy Research of the Russian Academy of Sciences, Irina Mironova in her article for the Security Index journal.

According to Irina Mironova, “Iran has explicit potential for reaching international markets of LNG taking into account that potential of trans-regional pipeline projects is substantially limited. How feasible is the “New Producers” scenario? First, that would depend on whether sanctions against Iran remain in place. The nation’s oil and gas sector has become thirsty for investments, and both Western companies and their Asian (in particular, Chinese) partners are seeking the opportunities to enter the market. For Asian marker actors, investing in exploration and extraction sector presents interest as an alternative to exploitation of non-conventional deposits even if the latter ones are located closer to the center of consumption”. 

In the changing conditions of the development of natural gas markets, Russia and Iran are playing on the same field. The changes that are taking place in Iran’s oil and gas sector have impact on the exporting potential of the country and will inevitably influence the potential Russian participation in international natural gas markets. We are also likely to see new competition in the international organizations. The future of competition between Russia and Iran may depend on the following factors: first, Iran’s conscious decision to enter markets that Russia is seeking (mostly non-European), and secondly, the prospect of coordinated actions within the framework of existing institutions in gas markets”, – says Irina Mironova.

The article “Russia and Iran in the Global Gas Markets: Future Competition Inevitable?” was published in Security Index journal No. 1 (112) Spring 2015; its full text is available on the PIR Center’s website (in Russian).

For further analysis on the topic of global gas markets see the articles by Andrey Shadursky titled “The Shale Revolution And New Rules Of The Game: Are Russia’s Positions In European Energy Markets In Danger?” published in Security Index No. 4 (111) Winter 2014 (in Russian) and by Yuri FedorovIran: a nuclear-weapon state or a future energy superpower?” published in Security Index No. 3 (110) Autumn 2014 (in Russian).

Detailed information on publications and advertising in Security Index journal is available by phone: +7 (495) 987-19-15 or by fax: +7 (495) 987-19-14. 

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