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Iran considers exporting natural gas to Europe

EconomyIran considers exporting natural gas to Europe

Tehran (The Times Groupe)- Iran is considering exporting gas to Europe under the circumstances of high energy prices caused by Russia’s conflict in Ukraine, an oil ministry official said Sunday.

In an interview with Shana, deputy oil minister Majid Chegeni said the Ministry of Petroleum (MOP) is studying the subject, but it hasn’t yet reached a conclusion.

“Iran always aims to develop energy diplomacy and expand the market,” he said.

Iranian gas reserves are among the largest in the world. However, the industry has been severely impacted by US sanctions, which were reinstated in 2018 by then-US President Donald Trump when Washington withdrew from the landmark nuclear deal between Iran and the world powers.

In Vienna, talks aimed at reviving the 2015 Joint Comprehensive Plan of Action (JCPOA), known as Iran Nuclear Deal began last year but have been on hold due to outstanding issues.

Since February, when Russia invaded Ukraine, global gas and oil prices skyrocketing, with many European countries dependent on energy imports from Russia.

Kyiv said Wednesday that Russia had halted gas supplies through a key transit hub in the east of the country, fueling fears that Moscow’s invasion could worsen Europe’s energy crisis.

Around 155 billion cubic meters of Russian gas were imported by the European Union last year, or 45 percent of its imports.

Tehran and Baghdad also signed a memorandum of understanding a few weeks ago that will increase Iranian gas exports to Iraq, Iran’s deputy oil minister confirmed.

„Gas exports from Iran have increased, and in this memorandum it was stated that Iraq will pay its debt of $1.6 billion to Iran by the end of May,” Chegeni said.

A third of Iraq’s gas needs are met by imports from its eastern neighbor despite its own substantial gas reserves. Poor investment due to decades of war and sanctions left Iraq dependent on imports.

However, US sanctions on Iranian oil and gas have complicated Iraq’s ability to pay for those imports.

A complex payment method is used by Baghdad to comply with US sanctions on Iran. The Iraqi government cannot simply give Iran cash, since payments must be used to import food and medicines.

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