Iran / Turkey: gas dominoes

Iran plans to resume pumping natural gas to Turkey on Monday, after dramatically reducing supplies last week.

The reduction of some 25 million cubic metres (mcm) per day was largely the knock-on effect of the interruption of Turkmen gas supplies to Iran, which receives up to 23 mcm from its Central Asian neighbour every day.

The Turkmen government has blamed the halt on technical problems; however, a pricing dispute could be the real motive as Ashgabat tries to leverage better terms from its customers.

Last month, Russia's Gazprom, which remains the main buyer of Turkmen gas, agreed to a 50% price increase to Ashgabat. In exchange, it secured an agreement that the Turkmen government would remain committed to the construction of the Caspian Littoral Pipeline to transport more gas to Russia. Indeed, Turkey generally relies on Russia to help it cover its gas deficit when other suppliers default. However, this year, rising gas shortages in the Russian domestic market and cold weather have led Moscow to reduce its deliveries to Turkey. 

This situation raises two questions. First, the interruption of Turkmen gas supplies adds to the plethora of concerns over Ashgabat's reliability as an energy partner, with which Europe could work productively to reduce its reliance on Russia. Second, gas demand in Russia will continue to grow, as will the shortages, forcing the government to prioritise the domestic market. This will leave foreign consumers vulnerable.