Iran gas can diversify European supplies in long term

Significance

The deal reached between Iran and the P5+1 negotiating group (UN Security Council permanent members plus Germany) on July 14 promises to end most sanctions on the country, in return for suspension and monitoring of its nuclear programme. If ratified by all parties, it will create opportunities for an expansion of Iran's gas production and exports. Iran is the holder of the world's largest gas reserves, according to BP estimates. It is also the third-largest producer (after the United States and Russia, and probably having overtaken Qatar during 2015), and the fourth-largest consumer.

Impacts

• Iran could increase gas exports by advancing projects stalled by sanctions, although most of these will take some years to come to fruition.
• Iran would seek to attract foreign investment into its gas industry to increase production and exports in the longer term.
• If this occurs, Iran will compete with other gas exporters, particularly Russia, into the 2020s.