Armed Conflicts
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Putin's new trick against the West! After Turkey, Russia is building a gas hub with Iran–Who will buy it?

The Russians see themselves losing the hydrocarbon game in the Eastern Mediterranean as Israel agreed with Greece to export natural gas to Europe via Cyprus.

"In the context of the global energy crisis, it was agreed on the export of Israeli natural gas through Greece and Cyprus, which will go all over Europe," Israel's Foreign Minister Cohen had said in his meeting with his Greek counterpart Nikos Dendias.

To recall, Cohen had discussed with Dendia the Iranian threat, the prospects for developing bilateral cooperation in the field of energy, as well as the "Abraham Accords", an agreement to normalize relations between Israel and Arab countries.



Also, 2023 may be a year of developments for the pharaonic project of the EastMed pipeline, which is estimated to turn southeastern Europe into a natural gas hub and greatly upgrade the geopolitical power of the countries involved.

The Meloni government is strongly aiming to strengthen energy independence from Russia and in 2023 could pave the way for a strategic infrastructure project for Italy, the EastMed gas pipeline.

The strategic project, which could bring natural gas to the Israel-Cyprus-Greece-Italy route, is now under active discussion and could emerge as a game changer in the eastern Mediterranean if Rome completes the Igi-Poseidon section from the Aegean to Puglia .

Alliance for natural gas

In contrast to all this, Russia can participate in the creation of not only the Turkish gas hub, but now the Iranian gas hub as well. However, Russia's assistance in bringing Iranian natural gas to the world market seems strange from an economic point of view.

Iran is the second largest holder of natural gas reserves in the world after Russia, and Iranian gas is a direct competitor to Russian gas. However, there are examples of successful unions of the main rivals for the sake of a goal in the world.

Iran plans to build a natural gas hub with the participation of Russia, Turkmenistan and Qatar in the Asaluyeh industrial area in the southern Iranian province of Bushehr, located on the shores of the Persian Gulf.

The region is home to the production center of the world's largest oil and gas field, North-South Pars. Natural gas reserves amount to 28 trillion cubic meters of gas plus 7 billion tons of oil.

Igor Yuskov, an expert at the University of Economics under the Government of the Russian Federation and National Energy Security, believes that Russian and Turkmen gas will come to Iran, mix with Iranian gas and some other, and change ownership.

There are many questions

One of them is where will the natural gas from the Iranian hub go, who will buy it from there? Two directions can be distinguished: to the west - to Europe or to the east - to India.

The traditions in the western direction seem doubtful. First, it is not clear why Russian gas should make such a detour of gas pipelines, through Central Asia to Turkey and on to Europe. "This is absurd," reports Igor Yuskov.

Second, Turkey is unlikely to approve the arrival of a competitor and may not let gas come from the Iranian hub because Turkey itself wants to be a gas hub for the Europeans.

Third, it is unprofitable for Russia itself to help Iranian gas come to Europe. Russian gas deliveries to Europe have been reduced but continue, including through Turkish Stream.

Therefore, it is more appropriate for the Iranian hub to consider the eastern direction.

"There is no competition in the East. And this direction provides an opportunity to enter the Pakistani and rapidly growing Indian market. Neither Turkmenistan, nor Russia, nor Iran are represented in these natural gas markets. For us, this is also an attractive story," Yuskov says.

Overall, the cooperation between Russia and Iran, the world's two biggest gas players, in the field of natural gas seems strange. These are two competitors who benefit from developing their projects on their own.


Why would Russia make Iranian gas powerful and ubiquitous? Perhaps the benefit is classified and outside the realm of natural gas. Another option is that both powerful players consider merging in order to increase their power and influence in the global natural gas market.

"I think all the talks are being held to show that Russia and Iran with other gas players are going to create an OPEC gas group. So be afraid and negotiate with us now, separately, before that happens. This is an attempt to draw out their negotiating positions," says Yuskov.

The Iranian gas hub is still a project in its early stages. It is not certain that this project will take place. And if it comes, then that prospect is not of the 2020s, but of the 2030s.


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