Iran: Turkey's price decrease request

National Iranian Gas Company (NIGC) manag­ing director Javad Oji acknowledged that Iran has received a request from Turkey to decrease the gas it exports to that country. Oji said Iran is looking into the request and plans to take measures.

He also noted that the government has no plans to increase gas rates with the implementation of the second phase of the subsidies reform plan.

Oji's remarks followed those of Turkish Energy Minister Taner Yildiz, who said that Iran had rejected its demand for cheaper natural gas and that Ankara might resort to international arbitration: 'We voiced our discomfort to them [Iranian officials] over the price of the natural gas we import and told them that the prices are high … so an international arbitration court seems inevitable.'

The announcement that Iran and Turkey are engaged in a spat over gas rates was a surprise, particularly as it came amid diplomatic visits by Iranian officials to Ankara. Iran views its gas exports to Turkey strategically, given that the country could provide a gateway to the European gas market.

Evidently, Ankara has leverage as it imports gas from both Iran and Russia. Turkey may also be taking advantage of the international pressure currently being applied against Iran in order to bargain for better conditions. Tehran will not be interested in prolonging a dispute over gas prices with one of its most important customers.

For more news and expert analysis about Iran, please see Iran Strategic Focus.

© 2012 Menas Associates