Harvard International Review: The Dash for Gas How Iran’s Gas Supply Can Change the Course of Nuclear Negotiations

The end of the 19th century, Lord Curzon, then the British Viceroy of India, described Iran and its neighboring Arab countries as “pieces on a chessboard upon which is being played out a game for the domination of the world.” Fast-forward to the 21st century and not much has changed, as the ongoing nuclear negotiations between Iran and the West have started to show implications well beyond the Middle East peacemaking process, even spilling over into the European Union’s strategic decisions on how to consciously uncouple from Russia’s gas supply monopoly. So far, while Iran reached an interim one year deal with the West in early 2013 to freeze all nuclear activities on the condition of being provided with a temporary easing of some sanctions, the pace of progress remains slow. For now, the West is failing to propose an attractive policy that would alter the intransigent stand of the Iranians. Meanwhile, European-Russian relations have taken a turn for the worse with the illegal annexation of Crimea, the deliberate destabilization of Ukraine by Russia, and the imposition of restrictive EU measures against the Russian Federation. While the political stance has many economic implications for Europe, the most stinging aspect is Russia’s tightening monopoly over the European Union’s energy supply. Moreover, with Germany’s decision to stop all domestic nuclear energy production after the environmental backlash experienced after the Fukushima incident, the European Union is likely to substitute even more of its energy demand with natural gas from Russia rather than polluting coal from Eastern Europe. If the European Union intends to speak with one voice vis-à-vis Russia and not remain politically influenced by a Russian monopoly on its gas supply, it will have to start diversifying its energy supply.

Realistically, Europe must pursue a win-win strategy with Iran where an easing of sanctions would entail a reciprocated of game-changing magnitude, able to address its main energy supply dilemma. The long-term substitution of Russian gas with supply from Iran is one potential solution. For Iran, replacing Russia as the EU’s long-term gas supplier is a highly lucrative avenue worth exploring, particularly as the recent drops in oil prices have started to impact the government’s federal budget. As a result, the implications for the relationship between Iran and Russia will have to be care- fully addressed; where, in recent years they have developed closer economic ties but historically have maintained more of a tense relationship. While there is no complete pipeline network in place that fully connects Iran’s gas grid to Europe, the country is already connected to Turkey via the Tabriz- Ankara pipeline—a prospective solution. The success and political repercussions of such a proposed deal can, however, only be approximated. Still it remains crucial to do so as only then will policy makers be able to negotiate concessions directly addressing deeply intertwined global systemic developments. MORE