The future of Russian-Iranian energy ties and the implications for the South Caucasus

Thkarenghazaryane Media Center, in cooperation with the Institute for War & Peace Reporting, held a panel discussion on how the geopolitics of the South Caucasus will be affected by the emergence of new Iranian-Russian ties in the energy sector.

Russia’s energy giant Gazprom has been talking to Tehran about potential investments in Iran’s natural gas sector in the event the sanctions on Iran are lifted. Possible deals include a swap where Russia would supply gas to northern Iran via pipelines running through Armenia or Azerbaijan and  take a share in liquefied natural gas exported from Iran’s Gulf terminals in return.

Expert on Iran Sevak Sarukhanyan is not optimistic about the perspectives of this cooperation. He says that “when speaking about joint Russian-Iranian energy projects, one should keep in mind there are more difficulties than opportunities.”

“The difficulties first of all come from the economic situation in Russia. The second problem is Iran’s legislature, which seriously restricts foreign investments in the oil and gas sector,” he said.

The expert added there is another important factor that should be taken into account. “Iran uses its oil and gas factors in its negotiations with the EU and is more interested in seeing European companies investing in the country, as it will reinforce Iran’s positions in Europe, accelerate the process of elimination of sanctions and bring high technologies to the country. However, this will not prevent some kind of cooperation beyween Russia and Iran.” Sevak Sarukhanyan added, however, that it’s hard to predict how this will relate to the South Caucasus.”

A new energy axis between Russia and Iran envisages serious changes for the countries of the South Caucasus, at the same time affecting the political relations in the region. Sergey Minasyan, head of the Political Studies Department at the Caucasus Institute in Yerevan considers that with absolutely matching problems and interests in the Middle East, Russia and Iran are actually in a “situational military-political alliance.”

“It’s obvious that the problems and interests of Moscow and Tehran are more than similar. Moreover, a “situational military-political alliance” has been formed in the face of Iran, Iraq, Assad’s administration and Moscow,” he said.

According to the political scientist, “this geopolitical rapprochement between Tehran and Moscow has contributed to two developments: Russia’s decisive role in solving the puzzle around Iran’s nuke program and Russia’s actions in Syria.” However, Sergey Minasyan agrees that speaking of Russian-Iranian economic cooperation, especially in the energy sector, is still untimely.

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