Iran inked a EUR 11 bn gas import agreement with Russia for 300 mn cubic meters of gas per day, IRNA reported last week, citing comments made by Iran’s Oil Minister Javad Owji. The 30-year agreement aims to bolster Iran’s domestic industries, expand its export capacities, position it as a regional hub for gas production, the minister said.

The details: The agreement will see Russia deliver 300 mn cubic meters of gas per day via the Caspian Sea, and Iran will export any surplus gas to countries in the region. Any cost of additional infrastructure will be handled by Russia, Owji said, according to Sky News Arabia. The financial revenues stand to generate between USD 10 bn to USD 12 bn annually, Owji said, adding that the agreement is unprecedented in Iranian history.

Why is this important? Iran — which sits on the world's second largest gas reserves after Russia — has been subjected to US sanctions that have hindered its access to technology and reduced its gas exports. The country also faced a substantial gas shortage earlier this year, which it has aimed to solve through investments from Russian energy giant Gazprom. Russia — which has also been subjected to Western sanctions — has faced obstacles to selling natural gas. The country’s total income from oil and gas exports in 1Q 2024 decreased by 47% y-o-y compared to the same period last year, hitting USD 37 bn.

Background: Russia’s Gazprom signed an MoU back in June with the National Iranian Gas Company (NIGC) to supply Russian gas to Iran. In July 2022, Gazprom inked a USD 40 bn MoU with the National Iranian Oil Company (NIOC).

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