Is Europe shooting itself in the foot (to the benefit of Russia)?
July 6th, 2010 by Pierre Noël, University of CambridgeThe logic behind the question in the title is straightforward. Iran is a country with very large reserves of natural gas, a lot of it relatively low-cost. With the right investment it could become an exporter of global significance in about a decade. Europe is one of the largest gas markets in the world. Its combination of liberalised electricity markets and ambitious environmental policies favour gas in power generation, at least in the mid-term. Russia’s position in the European gas market raises concerns of market power and politicisation. The EU supports new gas pipeline projects from Central Asia and the Middle East through Turkey and the availability of Iranian gas could be essential to the success of this diversification strategy. Russia, on the other hand, should want to prevent or delay the emergence of Iran as a large gas exporter.
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