Russia and Iran strengthen ties with major gas deal and nuclear pact
Russia and Iran have signed an agreement for the annual delivery of 1,944 billion cubic feet of gas and financial backing for a new nuclear power plant. This marks another step in bolstering cooperation between these nations, both of which are under Western sanctions.
What do you need to know?
- Russia and Iran signed an agreement for the delivery of 1,944 billion cubic feet of gas annually. The agreement was announced during the visit of Iranian Oil Minister Mohsen Paknejad to Moscow.
- Russia has committed to financing the construction of a new Iranian nuclear power plant. This initiative further strengthens the economic cooperation between the two countries.
- Iran, despite having large gas reserves, imports this fuel due to the collapse of its extraction industry. Western sanctions have heavily impacted the Iranian energy sector.
What are the details of the gas agreement?
During his visit to Moscow, Iranian Oil Minister Mohsen Paknejad announced the signing of an agreement for the delivery of 1,944 billion cubic feet of natural gas annually from Russia.
This amount of gas is comparable to the capacity of the currently non-operational Nord Stream 1 pipeline, which runs from Russia to Germany. Following the outbreak of the war in Ukraine, Russian oil and gas exports to Europe decreased sharply.
The meeting with Russian Energy Minister Sergey Schemelev also led to an agreement for Russia to supply Iran with 63 billion cubic feet of gas by 2025. However, the price of the supplies was not disclosed.
Why does Iran import gas despite large reserves?
Iran holds the world's second-largest gas reserves, right after Russia. However, the country is forced to import gas due to the collapse of its extraction industry, a consequence of Western sanctions. As part of their strengthened cooperation, Russia has committed to financing the construction of a new nuclear power plant in Iran.
What are the further plans for cooperation between Russia and Iran?
In addition to the gas agreement, Paknejad announced the signing of contracts with Russian corporations for the exploitation of seven Iranian oil fields valued at $4 billion. The cooperation is also expected to extend to agriculture and banking.
Russia imports, among other things, drones from Iran used in attacks on Ukraine. In January, Vladimir Putin hosted President Masud Pezeshkian at the Kremlin, where they signed a strategic partnership agreement.
Meanwhile, under President Donald Trump, the U.S. seeks to further isolate Iran by strengthening the sanctions regime. Trump also expresses a desire to conclude a nuclear deal with Tehran, aiming to limit Iran's nuclear program and ensure it does not acquire nuclear weapons. On Saturday, the third round of negotiations on this topic is set to take place in Oman. Representatives from both sides have positively assessed the outcomes of previous talks in Oman and Italy.
