The pipeline gas supplies from Iran to EU are interestingly poised. When Iran’s South Pars gas field signed $3.5 billion contract in mid 2007 with Turkmen gas of Turkey, there was strong opposition from the US. Recently, Foreign Minister of Iran, Manuchehr Mottaki has announced that Iran is ready to supply gas for the major European Union pipeline scheme, Nabucco project and that is just before the UN elite group could meet on to decide economic sanctions on Iran.
Then the drama has been unveiled in the recent UN meet to impose sanctions on Iran, and all the permanent members of the Security Council in unison agreed upon that. Ironically, except the US and the UK all other countries including China, Russia and France have business ties with Iran. But no one knows to what extent it is going to be implemented, especially in a scenario where Russia has agreed to provide support on Iran’s nuclear ambitions. The situation is more compounded by the EU’s diversification plans on gas supplies.
The 5 billion euros Nabucco project is a joint effort of oil and gas majors of Austria, Bulgaria, Hungary, Romania and Turkey. It aims to draw gas supplies to the EU through diverse routes to avoid depending solely on the supplies from Russia. The need for alternative supply route was strengthened when Russia and Ukraine disputed in 2006 which had resulted in severe gas supply shortage among EU member states. There is widespread support for the pipeline project from most EU states because a quarter of EU’s gas comes from Russia and the states believe that it would be unwise to depend on Russia. Europe to satiate its energy needs, it has to back the pipeline project.
Globalization has changed the way the world is doing business and the interdependence quotient is very high too. The era of partisan politics has come to an end, now every state’s political decision is based on business opportunities. In such a political quagmire, it has to be seen to what effect the UN is going to implement economic sanctions against Iran.