Iranian Gas and the Pivot of Global Development and Security
The nuclear deal between Iran and the 5+1 group, and the lifting of sanctions on Iran, have propelled regional and international movements to take advantage of the country’s unique and strategic resources. Although such movements started after the Geneva agreement in 2013, they were not fruitful due to the stability of sanctions. The Joint Comprehensive Plan of Action (JCPOA) breathed new life into the movements.
At present, by holding 157 billion barrels of in-situ crude oil and 37 trillion cubic meters of natural gas Iran is the third biggest holder of crude oil and the second biggest holder of natural gas. The country is the holder of largest hydrocarbon reserves in the world.
However, the reserves have been so far away from the international markets due to political and economic reasons. In the meantime, world powers are seriously determined to find a solution to resolve the Iran nuclear case rapidly through peaceful ways and remove economic transaction barriers.
Aside from political considerations, it seems that economic sanctions on Iran have put some pressures, though they were not one-sided and the global economy has also suffered losses. The continuation of this situation and the possibility of remaining away from the Iranian economy and its strategic resources will be very tough and unpleasant for regional and global economies.
Iranian gas can change political, security, and economic equations in regional and international arenas and be turned into the symbol of development, peace, security, as well as political and economic stability. The flow of the Iranian gas to eastern, western, northern, and southern borders can both turn the country into a strategic hub of energy and pave the way for boosting economic and political cooperation in regional and international levels.
Under such circumstances and due to the presence of internal and external political and security elements, such goals have not been materialized yet and many economic and development opportunities have been lost.
In the first look, the regional market has the highest potential to use Iran’s gas, and this issue is a declared policy of Iran. Strategic studies corroborate this. The Iranian gas potentially brings development and security for regional nations. Iran’s gas reserves provide an opportunity based on a win-win logic which can improve developmental and security capacities of Iran’s neighboring countries in the Middle East.
Naturally, such reserves will not make opportunities for Iran as the holder of huge oil and gas reserves. All the countries, proportional their distance from Iran, can benefit from the opportunity. Developmental and security outcomes and results will not be confined to this region, because security in the Middle East will lead to security in the world. Therefore, the map of future gas trade has been drawn on the base and the axis of Iran’s gas.
In addition to Iran’s western neighbor Turkey, to which Iran’s gas is currently flowing, India and Pakistan have signed gas export deal with Iran (but the project has been stalled due to political reasons). Meanwhile, Iraq will soon import gas from Iran. The United Arab Emirates, Kuwait, and Oman in the south, Jordan, Syria, and Lebanon in the west, Afghanistan in the east, and Armenia and Georgia in the north are among the potential buyers of the Iranian gas. Studies in this regard have been finalized with a number of countries and signing deals is imminent.
The flow of Iran’s gas to the regional countries will expand economic and political ties in the region. Regional security and stability will certainly form and culminate within the framework of unison and conformity of the regional countries.
In general, economic profit of the regional countries from this unparalleled capacity is much more than that of ultra-regional countries. But, geographical distance is not a barrier to European and Asian countries to take advantage of the resources.
Iran’s activity in the gas export market will end Russia’s dominance in the European and Asian gas markets and will reduce dependency and vulnerability of consumers, on one hand, and will reduce Russia’s pressures and threats, on the other hand, and will ultimately create a competitive gas market. In this market, the power of consumers for meeting their demands will increase. This issue is of high importance in developmental and strategic point of view.
Political pressures and restrictions of some big powers, such as the US and some regional countries due to the concern about the rise in dependence over Iran’s energy resources and consequently the reduction of their political maneuver power against Iran, have hindered the functioning of regional and ultra-regional gas maps on the axis of Iran.
However, it seems that sooner or later the period of limitations and fabricated pressures will come to an end and internal, regional, and international requirements will pave the way for forming economic and developmental procedures in South Asia, West Asia, and Southwest Asia.
Reaching this goal is cost- and time-consuming, and is a tough economic and political task. Undoubtedly, regional and ultra-regional needs of the gas market entails making huge investment in gas fields and raising production proportionally.
Dr. Alireza Soltani, energy economics expert, faculty member of Tehran’s Central Islamic Azad University