Russia and Iran ink gas deal

The new agreement comes as the two countries have been expanding energy and trade cooperation

Russian energy giant Gazprom has signed a strategic memorandum with Iran for pipeline gas supplies to the Islamic Republic, according to a statement by the company on Wednesday.

The agreement with the National Iranian Gas Company was clinched during a visit to Iran by a Russian delegation headed by Gazprom CEO Aleksey Miller, who met with Iranian Oil Minister Javad Owji. The signing ceremony was reportedly attended by interim Iranian President Mohammad Mokhber. No details about the memorandum have been revealed.

Iran, a major oil-producing country with large deposits and its own refineries, announced in 2023 plans to create an international gas hub with the participation of Russia, Qatar, and Turkmenistan.

Owji said last year that Iran was seeking to partner with Russia to develop new oil deposits in the country in addition to existing joint projects. Later, Russian Deputy Prime Minister Aleksandr Novak confirmed there were discussions about producing gas within a hub in southern Iran with the participation of Russian companies. Novak, however, noted that “it will take time to give this a specific shape.” 

Moscow and Tehran have been forging closer energy and trade ties as both countries are under Western sanctions.

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In 2022, Novak announced a massive energy deal with Iran worth $40 billion and an agreement to swap supplies of oil and natural gas. Since then, the two countries have been working out the routes and technical aspects of the deal. Russia made its first fuel deliveries to Iran by rail in April 2023.

Currently, the main overland route for cargo sent from Russia to Iran passes through Azerbaijan. This is part of the so-called International North-South Transport Corridor (INSTC), a 7,200-kilometer-long multi-mode transit system that connects ship, rail, and road routes for moving cargo between India, Iran, Azerbaijan, Central Asia, Russia, and the rest of Europe.

Construction of the INSTC started in the early 2000s, but developing it further has taken on a new impetus in light of Western sanctions that have forced Russia to shift its trade routes towards Asia and the Middle East.