Iran’s Gas Market after the Nuclear Deal (Characteristics and Opportunities)

Abstract

Iran owns the first largest proven gas reserves in the world. Iran's energy wealth and geo-strategic location a bridge between East and West – allow it to export energy resources to European and Asian energy markets. However, due to various internal and international political, economic, and security constellations, Iran could not successfully exercise its energy potential internationally. The international agreement of July 2015, preconditioning lifting of sanctions and preparation of a new more competitive oil and gas contract framework in Iran signal a significant change in the international and domestic environment, allowing Iran to re-emerge in the global energy stage in a new atmosphere. Reopening Iran's energy sector will offer many new opportunities for the international oil companies. The big question is what are the Prospects and challenges for Iran’s Gas Sector? The aim of this paper is to analyze the country’s gas outlook in the aftermath of a potential nuclear deal, looking at the potential production trends, at the potential export options, but also at the political and commercial barriers that such a development will likely have to face. In fact, a full resolution of the nuclear issue will unlikely automatically change the Iranian gas market in the short term, as a number of commercial issues will continue to remain on the table. Keywords: challenges, International gas market, Iran gas market, nuclear deal, positional, South ParsJEL: G38, Q40