Iran considering to export gas to Europe

Iran is considering selling gas to Europe, an oil ministry official said on Sunday, amid rising energy prices caused by Russia’s conflict in Ukraine.

“Iran is studying this subject but we have not reached a conclusion yet,” deputy oil minister Majid Chegeni was quoted as saying by the ministry’s official news agency, Shana.

“Iran is always after the development of energy diplomacy and expansion of the market,” he added.

Despite having one of the world’s largest known gas reserves, Iran’s sector has been affected by US sanctions, which were reimposed in 2018 after Washington withdrew from a historic nuclear deal reached between Tehran and global powers.

Talks to resurrect the 2015 nuclear accord began last year in Vienna but have been on hold for some weeks due to remaining concerns.

Russia’s invasion of Ukraine in February drove up global oil and gas prices, as many European nations rely on Russian energy supplies.

The situation deteriorated Wednesday when Kyiv said that Russia has suspended gas shipments through a crucial transit point in Ukraine’s east, stoking worries that Moscow’s incursion will exacerbate Europe’s energy crisis.

Last year, the European Union received around 155 billion cubic meters of Russian gas, accounting for 45 percent of its imports.

Iran’s deputy oil minister also confirmed that Tehran and Baghdad had signed a memorandum of understanding a few weeks ago that will see the Islamic republic increase gas exports to Iraq.

“Gas exports from Iran increased and in this memorandum, it was stated that Iraq’s debt of $1.6 billion to Iran will be paid by the end of May,” Chegeni added.

Despite having significant gas reserves of its own, Iraq is dependent on imports from its eastern neighbor for one-third of its gas demands due to insufficient investment as a result of decades of conflict and sanctions.

However, US sanctions on Iranian oil and gas have hindered Iraq’s payments for imports.

Baghdad utilizes a complicated payment system to comply with a US sanctions exemption for Iran. Iraq is not permitted to simply give over cash to Iran since payments must be used to support food and pharmaceutical imports.

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