Russia, Iran Sign $40 Billion Oil and Gas Deal

The National Iranian Oil Company (NIOC) and Russia’s state owned natural gas major Gazprom signed a memorandum of understanding (MoU) on Tuesday which will be worth around $40 billion. The deal was signed during an online ceremony by the CEOs of both companies at a time when Putin visits Tehran for a summit with his Iranian and Turkish counterparts.

According to Iran’s largest ever investment deal in its oil industry, Gazprom will support NIOC to develop two gas fields, Kish and North Pars, in addition to six oil fields. Gazprom will also be involved in the completion of liquefied natural gas (LNG) projects and construction of gas export pipelines.

NIOC and Gazprom will also cooperate on gas and product swap deals, and other scientific and technological cooperations.

Although Iran is home to the world’s second largest natural gas reserves behind Russia, U.S. sanctions have limited the country’s export capabilities as it hindered access to technology and slowed down development.

Putin’s Tehran visit is being watched closely as Moscow’s invasion of Ukraine has reshuffled global energy markets, driving prices to record levels, which have been a big reason for higher living costs and rising inflation.

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