Russia, Iran agree on 55bcm of annual gas supplies

Russia and Iran have reached a preliminary agreement on annual gas supplies of 55 billion cubic metres (bcm), with the pricing yet to be finalised, according to a Reuters report, citing sources.

Concurrently, Russia has committed to financing the construction of a new nuclear power plant in Iran.

The deal comes at a time when the US is attempting to isolate Iran unless it consents to a new nuclear inspection deal.

Amidst the ongoing military conflict in Ukraine, Russia has fortified its relationship with Iran, with both countries facing Western sanctions and experiencing a decline in Russian oil and gas exports to Europe.

Russia, with a history of nuclear cooperation with Iran, assisted in building the Bushehr nuclear reactor, Iran's first nuclear power plant.

Iranian Oil Minister Mohsen Paknejad's visit to Moscow this week culminated in a meeting with Russian Energy Minister Sergei Tsivilev at an intergovernmental commission, where the gas transfer agreement and nuclear plant financing were discussed, the report said.

Despite Iran's vast gas reserves, second only to Russia, it still imports gas due to under-investment, partly caused by US sanctions.

Tsivilev revealed that Russia may supply Iran with 1.8bcm of natural gas this year, pending a price agreement, the report added.

Russian President Vladimir Putin had previously indicated the potential for supplying up to 55bcm of gas annually to Iran, starting with lower volumes.

Paknejad announced on state TV that Iran is set to sign a $4bn (IR168.03trn) agreement with Russian companies to develop seven Iranian oilfields.

Although the details of the bilateral agreements signed by Paknejad and Tsivilev were not disclosed, it is known that Russian gas giant Gazprom signed a memorandum last June with the National Iranian Gas Company for pipeline gas supplies to Iran, although the pipeline route remains undisclosed.

Paknejad confirmed Iran's commitment to the agreements with Gazprom, including establishing a regional gas distribution hub, potentially involving Qatar and Turkmenistan.

During his meeting with Russian Deputy Prime Minister Alexander Novak, Paknejad commented on the uncertainties in the global oil market and the impact of recent US tariffs.

Furthermore, Paknejad mentioned that OPEC and its allies, led by Russia (OPEC+), would make decisions to ensure market stability, without specifying the measures.

Amidst these developments, several OPEC+ members have suggested accelerating oil output hikes, with a policy meeting scheduled for early May.

"Russia, Iran agree on 55bcm of annual gas supplies" was originally created and published by Offshore Technology, a GlobalData owned brand.