Russian energy ties with Iran send US a message

With European and US companies out of the competition, Russia’s Gazprom has an edge as it bids for a bigger role in developing the world’s second-largest gas reserves

AS the United States warns the world away from business with Tehran, Moscow’s tightening ties to Iran’s energy sector underline Russia’s differences with Washington over Iranian nuclear plans and Kosovo’s independence.

While the timing of Moscow’s announcement on Tuesday may have been political, the deal for Russian state-controlled energy giant Gazprom to take on big new Iranian oil and gas projects was a long time in the making and dovetails with Gazprom’s strategic ambitions, analysts said. Gazprom, the world’s biggest gas producer, will play a larger role in developing Iran’s giant South Pars gas field and will also drill for oil.

“The Russian government and the United States are at loggerheads over how to engage with Iran, with Russia actively favouring a more open relationship,” said Ronald Smith, chief strategist at Alfa Bank. “This makes Gazprom rather indifferent to American policy wishes.” The US accuses Iran of using uranium enrichment to develop weapons, while Tehran says it needs nuclear power. Russia has been reluctant to impose more UN sanctions on Iran.

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