The Analysis of Political Relations between Iran and Russia in the Europe Gas Market

Geopolitical factors have been the most important element affecting political relations between countries. In the period after the Cold War, the geo-economic factors have earned a special role among the geopolitical elements. In recent years, the main factor defining energy security in the Caspian basin is the competition between Europe and the United States on the one hand, and Russia on the other. Russia is the largest conventional gas reserve holder in the world and one of the most important suppliers to the European market. With Iran being the second largest conventional gas reserve holder and given its strategic geographical position as an intermediary between European and Asian markets, there is naturally a potential for a great rivalry between Russia and Iran for market shares in these regions. However, Russia already has an extensive pipeline infrastructure in place and is an established supplier to European and Asian countries. Iran, on the other hand, (due to its isolation and internal hurdles) currently only supplies Turkey, Armenia, Azerbaijan and soon Pakistan with small volumes of natural gas. Russia also seeks to diversify its export markets to enhance demand security. This article seeks to investigate and explain Iran and Russia’s competition in the field of geo-economics with an emphasis on the gas market. The present study suggests that Russia, while trying to keep Iran in the orbit of its strategic allies, also tries to keep away its most dangerous potential rival in geo-economics from European gas market.