Wednesday, January 23, 2008

Pipeline Faultlines

In the latest development in the ongoing pipeline diplomacy roiling the Middle East and Europe, Iran's foreign minister, Manouchehr Mottaki, announced that Iran was willing to supply gas for the EU's Nabucco pipeline project. Most significant about the announcement, which comes on the heels of two major Russian gas deals that strengthened Moscow's grip on European supply routes, is that Mottaki made specific mention of Europe's desire to diversify its gas sources.

Obviously, the offer must be understood principally in the context of the ongoing nuclear standoff, as an Iranian attempt to weaken European opposition to its uranium enrichment program and create a wedge between Washington and its European allies. In light of today's announcement about the agreement reached over a third round of UN sanctions, that's unlikely to happen. Even if the sanctions were watered down to bring Russia and China on board, they are symbolically extremely significant.

But the offer also coincides with Tehran's lingering and increasingly bitter dispute over a gas delivery contract with Turkmenistan. Turkmenistan has shut down its pipeline to Iran citing technical problems, but most observers believe the move, coming in the midst of a particularly cold Iranian winter, is a bareknuckled attempt to renegotiate the contract to reflect the higher price (roughly double) that Moscow recently agreed to pay for Turkmenistan's supplies.

If the Iranian offer signals a potential faultline in the Iran-Russian tactical alliance, it's one worth pursuing. While sitting on the second largest known natural gas reserves (after Russia), Iran would need enormous investment to develop its extraction and delivery capacities, which explains its vulnerability to Turkmenistan's tactics.

So far, the Russians have continued to supply the nuclear fuel to the Bushehr reactor, and their reticence has contributed to watering down the latest round of UN sanctions. But Moscow did sign on, and its efforts to solidify its energy position have come at the expense of Iran's domestic supplies. In response, Iran seems to be signalling that its allegiance is not set in stone, and that for the time being all its alignments are tactical rather than strategic in nature.

Posted by Judah in:  European Union   International Relations   Iran   

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