Europe’s Leverage With Iran

When it comes to energy supplies, Iran is Europe’s alternative to Russia—a fact that explains the attraction of striking giant energy deals with Tehran.

But what’s in it for Iran? Iran can, if they wish, snub European companies and give lucrative energy deals to Chinese oil companies in exchange for political cover (which Europe would not provide). If Europe continues to support further sanctions against Iran, Tehran might indeed threaten such steps, as some in Europe fear. However, if Iran wishes ever to export gas to Europe, it needs either pipelines that will link Iran’s gas fields to the European grid or liquefied natural gas (LNG) terminals that would enable gas to be transported in liquid form. And here’s the rub–the leading companies in the field of LNG technology are all Western.

Iran may sit on the second largest world reserve of natural gas, and Europe may well need it. But the leverage is more on Europe’s side–because without European technology Iran’s natural resources will remain forever untapped. Incidentally, this is a possible area for sanctions too. Denying Iran the needed technology to develop this crucial sector and profit from it would hurt the regime where it’s most vulnerable.

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Europe’s Leverage With Iran

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