Iran to become competitor to Russia in energy markets

Published 21.07.2015 23:23

Sara Vakhshouri, president of the Washington-based SVB Energy International and a consultant at the National Iranian Oil Company, said that Iran would be an important competitor to Russia in the global oil and natural gas markets after the nuclear agreement was signed with P5+1 countries comprising the U.S., U.K., France, Russia, China and Germany.

Vakhshouri told Anadolu Agency that there would be a fierce competition in the global energy markets between Iran and Russia, which have become allies recently thanks to the mutual steps taken by the two countries.

Emphasizing that European energy companies have already started to negotiate with Iranian energy authorities due to the country's vast oil and natural gas reserves, Vakhshouri said: "Iran has made new investment regulations for the energy sector. Those regulations are creating a much more attractive investment climate compared to the past."

Now that sanction will be lifted and new regulations are enforced, Iran can reach the technology that it needs to increase its oil and natural gas production, Vakhshouri said, adding: "Europe is trying to decrease its dependency on Russia oil and natural gas after the Ukraine crisis. Iran is a perfect alternative for Europe's energy diversity." She also stressed that Russia was not as attractive as before for energy investments because of the sanctions imposed on the country.

On the other hand, Alexander Kurdin, the head of Russia's Department for Strategic Research in Energy based in Moscow, claimed that it was not yet possible to see competition between Russia and Iran in global oil and natural gas markets. Kurdin stressed that while Iran exports oil to India and China, Russia sells oil mostly to European countries.

Kurdin said that Iran does not possess sufficient facilities for processing natural gas, adding: "If we consider the political problems in the region, it is very difficult to say that a natural gas pipeline can be built from Iran to Europe within a short period. Additionally, Iran needs significant investments and time for the export of liquefied natural gas [LNG]."

Kurdin said that even if some competition occurs between Russia and Iran if Europe continues to impose political pressure on Russia and Iran completes the necessary investments for LNG, Iran's natural gas export amount cannot compete with Russian export figures.

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