Iran can't compete with Russia for Europe’s gas market

Iran can't compete with Russia for Europe’s gas market

Baku, Azerbaijan, Aug. 5

By Elena Kosolapova - Trend:

Despite the nuclear deal with the P5+1, Iran has very little chance to deliver its gas to the European market in the years to come, Vladimir Yevseyev, the expert on Iran, the director of Russian Center for Public Policy Research, told Trend August 5.

"Moreover, in the medium term, Iran's gas will not be able to compete with the Russian gas in the European market," the expert added.

He said there are several reasons for this.

"Firstly, Iran, in order to bring its gas to the European market, needs the lifting of sanctions, and so far the matter rests in only their mitigation," said Yevseyev. "It is premature to say that in the near future there will be the lifting of sanctions or defrosting of significant assets of Iran."

Even in the most favorable case, the process of easing the sanctions will only begin the next year. Yevseyev added.

"And the US will for eight years only suspend the sanctions, while Europe, perhaps, may stop them. In any case, it is necessary to wait for a report of the IAEA director general, and on this basis only some proposals will be developed to mitigate the sanctions."

Secondly, the expert said, as of now Iran has no free volumes of gas that it could deliver to Europe.

Domestic gas production, especially for electricity generation is growing very fast in Iran and in fact, the whole volume of production in the country is used in the domestic market, he said.

Some free volumes are supplied to Iraq and these supplies will be expanded, according to the expert.

Moreover, there are plans on laying an underwater pipeline to Oman and the issue of gas supply to Pakistan also remains open, he added.

"Under these conditions, I can't see even a theoretical possibility that there can emerge any considerable volumes of Iranian gas which could be delivered to Europe," he said.

Although Iran has huge gas reserve, considerable amount of investments - $50 billion to 80 billion - as well as new technologies will be required for processing it, according to estimations, said the expert.

He added that Iran will not be able to get them in the near future.

The expert said he is more than confident that even if the Iranian assets worth about $130 billion in the US are unfrozen, Iran won't get this money in a short time.
Unfreezing these funds will take long time, if it at all, according to the expert.

"Foreign investors will be afraid of investing in the projects in Iran as the agreement signed between Iran and the "Six" is reversible and there is no guarantee that it will not be canceled," the expert said.

"Nobody knows what will happen in the US after the new president is elected next year," he said. "There is no understanding of the situation in two years. In such circumstances, big business will not work."

He said that in such circumstances, most likely, Iran would be unable to obtain Western technologies in the required quantities.

"In such circumstances, it is impossible to rapidly ramp up the production of natural gas," the expert said.

"Moreover, Iran wants to sell its gas at a high price," he said. "The buyers, including European ones, are not pleased with this."

"Thus, the gas pipeline from Iran to Turkey, which allows to supply at least 10 billion cubic meters, has been filled by only six billion cubic meters mainly because of the high price of Iranian gas," he said.

"At present, if we compare the prices at which Turkey buys natural gas, the most expensive gas is Iran's gas," the expert said. "By its price Russia's gas ranks second. And the cheapest gas is Azerbaijan's gas."

"As for Iranian oil, then, its supplies to Europe are more real," he said.

"A part of Iranian oil is located in tanks: either in tankers or in storage on the territory of Iran," he said. "The volumes of this oil are nearly 40 million barrels per day. It could appear on the market if the oil embargo is lifted," he said.

However, in order to further have a serious impact on the oil market, Iran will need to increase production volumes.

"Now, Iran can increase its oil production by about 500,000-800,000 barrels per day," said Yevseyev. "It is not so critical for world prices. Therefore, it is premature to say that Iran will be able to have a serious impact on the oil market."

As for any other Iranian products, in addition to oil and gas, Iran currently doesn't produce anything that is very necessary to Europe in large volumes, according to the expert.

He went on to add that Iranian business is mainly of a regional nature and doesn't seriously depend on Europe.

In addition, the technologies in Europe are higher than in Iran, and, accordingly, the Iranian products won't be in great demand on the European market. However, they are popular in neighboring countries, he said.

"All the production they have for export to Europe has relatively modest volumes," the expert said. "Maybe, pistachios are the only exception. The only thing that Iran can export in large volumes at the moment is pistachios."

Edited by CN
---

Follow the author on Twitter: @E_Kosolapova

Second Iranian oil tanker enters Venezuelan water
Second Iranian oil tanker enters Venezuelan water
Official talks latest status of Iran-India contract on Chabahar port
Official talks latest status of Iran-India contract on Chabahar port
Iran expects domestic wheat production to reach 14 million tons
Iran expects domestic wheat production to reach 14 million tons
Loading Bars
Latest
Singapore cuts 2020 GDP outlook for third time as virus batters economy
More African countries should heed UN call for global ceasefire: Guterres
Spain revises coronavirus death toll down by nearly 2,000
Siemens to initially keep 45% in Siemens Energy after spin-off: sources
Small aircraft crashes in Rome, one passenger missing
WHO suspends hydroxychloroquine, chloraquine trials as COVID-19 treatment
Second Iranian oil tanker enters Venezuelan water
Regeneron to buy back $5 billion stake held by Sanofi
Polish health minister denies wrongdoing in procurement spat
President Ilham Aliyev, First Lady Mehriban Aliyeva view restoration and conservation works at Pir Omar Sultan shrine in Shamakhi (PHOTO/VİDEO)
President Ilham Aliyev, First Lady Mehriban Aliyeva attend opening of orphanage-kindergarten No2 constructed on initiative of Heydar Aliyev Foundation in Shamakhi (PHOTO/VİDEO)
President Ilham Aliyev, First Lady Mehriban Aliyeva view conditions created at multi-apartment buildings constructed in Shamakhi (PHOTO/VİDEO)
President Ilham Aliyev, First Lady Mehriban Aliyeva view transport vehicles and special machinery allocated to Shamakhi district (PHOTO/VİDEO)
No alternative to renewable energy
Former UK PM Tony Blair questions Trump's leadership in coronavirus pandemic
Bosnian Premier League among worst in world for coach stability: survey
Philippines posts five new coronavirus deaths, 284 infections
Azerbaijan's E-PUL payment system grows user base, prepares new project
Azerbaijani Compulsory Insurance Bureau talks priorities in insurance market
Azerbaijani president, first lady view renovation work done on Pirsaat Baba shrine in Shamakhi (PHOTO)
Official talks latest status of Iran-India contract on Chabahar port
Iran expects domestic wheat production to reach 14 million tons
Iran to sell debt securities, to make up for budget deficit
Azerbaijan detects 149 new COVID-19 cases
Production of shoes surges in Azerbaijan
BSTDB, Development Bank of Austria to finance SMEs in Azerbaijan
Azerbaijani President Ilham Aliyev, First Lady Mehriban Aliyeva arrive in Shamakhi district (PHOTO)
TAP updates on compressor and metering stations
TAP: Offshore section not fully completed yet
Azerbaijan’s Finex Kredit talks about expansion of lending in agriculture
Kazakhstan cuts time on issuing certificates on import of perishable goods
Kazakhstan reveals state-backed funding measures for SMEs
Chairman of Kazakhstan’s Nuclear and Energy Supervision Committee appointed
Kazakhstan's Altynalmas starts commissioning its new gold recovery plant
National Iranian Oil Company reveals its debts to banks
Azerbaijani president congratulates Georgian president
Kazakh Tengizchevroil evacuates employees from field to prevent COVID-19 spread
Azerbaijani Agricultural Insurance Fund talks about shares of companies
Kazakhstan's Mangystaumunaigas oil&gas company reports net income decrease
Kazakhstan sets ceiling retail prices on commercial gas
Turkmenistan to establish Reserve Currency Fund
Geostat: Number of Georgian travelers taking trips abroad declines
Enhancing Ramsar Airport now allows Iran to receive bigger aircraft
Average monthly income up in Georgia
Iran to commission over 20 airport infrastructure facilities
Iran reveals its COVID-19 statistics for May 25
Indonesia reports 479 new coronavirus cases
Spain to welcome foreign tourists back from July
Malaysia reports 172 new coronavirus cases, most of them foreigners
Expert talks about ways to develop e-commerce in Azerbaijan
Iran sees 'no problem' with launching gas exports to Syria - minister
Georgia's COVID-19 cases climb to 731
Over 12K Georgian citizens brought home since COVID-19 outbreak
Iran hints at stopping export of gas condensate
Turkmenistan to receive loan from OPEC to support local businesses
Uzbekistan increases heat energy production
China supplies innovative drip irrigation technology to Uzbekistan
Uzbekistan increasing fuel production
Turkish president makes phone call to Azerbaijani president
TAV Airports look to turn Kazakhstan's Almaty into regional cargo hub
Turkmenistan, Turkey lay emphasis on co-op in trade, humanitarian sectors
Oil prices not to recover to pre-coronavirus levels as quickly as they fell
Kazakh national postal service operator to buy liquefied gas via tender
Uzbekistan lifts some restrictions to boost construction work countrywide
Azerbaijani oil prices for May 18-22
Iran's Khatunabad copper smelter’s production increases
Kazakhstan sees positive signs with its trade volume with Europe
Iran partially pays subsidies to construction company as part of Mehr Housing Project
Kazakhstan closes off Karachaganak field as COVID-19 cases reported
Iran- Iraq trade via Parviz Khan customs checkpoint resumes
MFA: Armenian PM’s congratulations on occasion of Ramadan - highest level of hypocrisy
COVID-19 cases in Uzbekistan increase to 3,180
FM: Azerbaijan, Turkey - together in joy and sorrow
Cement exports from Turkey to Kyrgyzstan fall sharply
Iran's watermelon exporters in Turkey face dilemma, as business suffers
Iran's foreign currency policy slows down exports
Kazakhstan’s oil producing company to buy pipes via tender
Armenia violates ceasefire with Azerbaijan 23 times
Iran Khodro breaks production record despite COVID-19 pandemic
Georgian banks' net profit up
Aston Martin chief to leave, Mercedes-AMG CEO to replace him
Iran allows high-risk businesses to re-open, with new health rules in place
Chamber of Commerce talks Iranian-Tajik trade amid COVID-19
Onshore oil, gas and condensate fields in Azerbaijan
Iran warns of health protocol as COVID-19 cases soar in some provinces
TANAP consortium talks on creation of operator company
Thailand reports 2 new coronavirus cases, 1 more death
Kyrgyzstan reports 30 new COVID - 19 cases, 1433 in total
Armenia ranks 6th with number of daily confirmed COVID-19 cases per million people
Number of COVID-19 cases surpasses 8,500 in Kazakhstan
BSTDB President: Azerbaijan has substantial buffers to mitigate COVID-19 impact on economy
Syrian troops destroy terrorist unit in southwest of Raqqa province
Chinese mainland reports no new domestically transmitted COVID-19 cases
S. Korea reports 16 more cases of new coronavirus, total at 11,206
U.S. COVID-19 death toll nears 100,000, New York Times calls it "incalculable loss"
White House limits travel to U.S. from Brazil due to coronavirus
Italy's COVID-19 death toll rises by 50 to 32,785
Coronavirus could cost Mexico a million jobs: president
UK COVID-19 deaths rise to 36,793 as another 118 patients die
Israel reports no COVID-19 death cases for 4 consecutive days
All news