Iranian Sanctions and Energy Security
The European Union today published regulations in response to Iran’s continued efforts to further its nuclear program. The sanctions are designed to impair Iranian business activities, particularly in it energy sector.
However, the Shah Deniz natural-gas field off the coast of Azerbaijan, was exempted from the measures.
BP Plc and Statoil ASA, each with stakes of 25.5 percent, lead the project, however Iran’s Naftiran Intertrade Co. has a ten percent stake.
Other partners in Shah Deniz are State Oil Co. of Azerbaijan, OAO Lukoil, and Total SA, each with 10 percent stakes and Turkiye Petrolleri AO holding nine percent.
Europe has been looking towards Shah Deniz, Azerbaijan’s biggest gas field, as a source of supply for the EU based Nabucco gas pipeline. It hopes to import gas by from the Caspian Sea area and Middle East in order to reduce reliance on Russian gas, thus achieving greater European energy security.
Nabucco had earlier confirmed that it had no current plans for a feeder line from the Iranian border to Turkey, as the geopolitical climate wasn't favorable for an Iranian role in the project.
Imposing sanctions except for where it benefits you appears to be hypocritical at best, but the exemption of Shah Deniz is inconsistent with the position taken by Nabucco (no doubt imposed by its political overseers).
Such is the nature of geo-political jockeying.
Iran has dismissed efficacy of sanctions against Iran's energy sector.
Oil Minister Massoud Mir-Kazzemi has been underlining Iran's important role in supplying energy to the international market.
"Energy security without Iran has no meaning," he recently stated.
Nobuo Tanaka, executive director of International Energy Agency has said that sanctions on Iran’s energy sector will actually hinder the goal of energy security and price stability, as the Islamic republic is deprived of much-needed investment in its oil and gas sector.
“Iran has huge potential but they need investment…the sanctions are impacting on the necessary investment into Iran for future capacity increase,” said Tanaka, at a recent conference in London.
Mir-Kazzemi dismissed sanctions against Iran as having "no impact whatsoever"
The Iranian minister stated that sanctions were an "opportunity" for Iran's energy sector to become self-sufficient.
It is likely the Minister Mir-Kazzemi is confident that there are likely other players, than the United States and Europe, who would be most happy to step up to invest in the Iranian energy sector.
That scenario, would not likely further the prospects of European energy security.