Ban on Iran’s natural gas exports to have limited intl impact – US agency report

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Iran-Turkey gas pipeline. Photo – Reuters/Scanpix

A US report due to be released next week would suggest that a reduction in natural gas exports from Iran would not have much impact on world energy markets but could hurt Turkey and part of Azerbaijan.

The Obama administration is going to use the report to broaden sanctions on Iran over its controversial nuclear programme to include sales of natural gas.

“The potential global impacts of restricting Iranian gas exports are limited,” the US Energy Information Administration (EIA) report noted.

Reuters news agency obtained a copy of the report ahead of its publication.

Washington and other Western governments are targeting Iran’s energy sector with cut-throat sanctions in their bid to hamper revenues they believe Iran is using to build nuclear weapons. Tehran insists its nuclear programme is for civilian purposes.

European Union member states are said to be workking on a package of sanctions against Iran with a goal of formally adopting them at a meeting of foreign ministers on 15 October in Luxembourg.

“The (EIA) report gives cover for the administration to broaden sanctions to cover natural gas exports,” Mark Dubowitz, the head of the Foundation for Defense of Democracies, an advocate for stronger sanctions on Iran, said.

Iran, holder of the largest reserves of natural gas in the world, exports mainly to Turkey, which buys more than 90% of the output under long term contracts. Armenia and Azerbaijan purchase 6% and 3%, respectively.

“Clearly, Turkey would be placed in a very difficult position in the event that it is unable to continue importing Iranian natural gas,” the EIA said.

A prolonged period without access to Iran’s natural gas could “have a major disruptive effect” on Turkish industry, home heating and power generation, the report said.

Congress is also considering tweaks to a US sanctions law that could blacklist a broader range of Iran’s energy sector.

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