Fears of price war as Iran cuts gas supply

Daily Telegraph: Fears have been raised that Iran could use its huge gas reserves as an economic weapon after it cut off most of its gas supply to Turkey. The Daily Telegraph

By Edmund Conway

Fears have been raised that Iran could use its huge gas reserves as an economic weapon after it cut off most of its gas supply to Turkey.

Iran confirmed yesterday that it had slashed exports to its neighbour to 5m cubic metres a day, compared to the usual 20m cubic metres.

Iran blamed its action on Turkmenistan, which has stopped supplying Iran, but the move sparked concerns that Iran could limit gas exports to boost prices.

The action comes two years after Russia cut its gas supply to Ukraine, causing energy prices to rocket.

Iranian representatives said they had taken the action after many Iranian households were left without gas during freezing winter weather. “After the recent sharp drops in temperature and the halt in deliveries from Turkmenistan, exports of gas to Turkey have been cut to a minimum,” said Iranian news agency Fars.

Turkey is currently the only large importer of Iranian gas, though more countries are expected to join Iran’s network in the coming years.

Despite having the world’s second-biggest gas reserves after Russia, Iran suffers from perennial energy shortages due to a lack of investment in the sector. This is one of its major arguments for developing its controversial nuclear programme.