On February 11, 2025 an energy agreement has been signed between Turkey and Turkmenistan which could have a significant impact on the region’s gas market.
The agreement, signed between the state-owned pipeline company “BOTAŞ” from Turkey and “Turkmengaz” from Turkmenistan, paves the way for the transfer of Turkmen gas to Turkey. According to the document, gas exports from Turkmenistan will begin on March 1, 2025.
As a Country with the second gas reserves in the world after Russia, Iran has a huge energy potential, however, because of the international sanctions, particularly the US sanctions, this potential has remained largely unfulfilled as Iran was not able to obtain the necessary technology from the west to develop the needed infrastructure to exploit its gas fields, particularly the huge South Pars field, losing ground to Qatar. At the same time, Teheran could not develop the LNG market because the western technology has been missing and China could not fill the gap.
At the same time, Iran was largely cut from the regional projects and discussions related to the gas pipelines aimed to bring gas to Europe. The same for the projects related to its eastern neighbours (i.e. Pakistan). The history (and the failures) of the “peace” pipeline (IPI) is known.
The agreement signed between Turkey and Turkmenistan, however, could open some interesting perspectives to Teheran in this field.
An analysis published on IRGC linked Javan explains the potential benefits for Iran coming from the project and the related expectations.
I report here the translation of the article:
“According to IRNA, the agreement was signed at a time when geopolitical developments in the region, growing energy needs in Europe and efforts by Central Asian countries to reduce dependence on traditional markets have increased its importance. Turkey, as one of the main energy transit centers in the region, is trying to strengthen its position as a gas hub. Currently, China is the largest buyer of Turkmenistan’s gas, which, with the fourth largest gas reserves in the world, is seeking to diversify its gas export routes, and this agreement could play a key role in this process.
Mehdi Khorsand, an expert on political economy, told IRNA’s foreign policy correspondent about the importance of this agreement and its consequences: “This agreement is of considerable importance for the Islamic Republic of Iran from various aspects. First, it can consolidate Iran’s position as a vital passage for energy transit and challenge the geographical monopoly that some regional competitors have been trying to establish in recent years.”
Iran’s geopolitical potential in the energy sector could act as a factor in mitigating the impact of sanctions and creating alternative routes for the country’s international trade.
The agreement to transport gas from Turkmenistan to Turkey comes at a time when other projects, such as the Turkmenistan-Afghanistan-Pakistan-India pipeline and the Trans-Caspian pipeline, have faced security, legal, and environmental challenges. In the meantime, the pipeline’s passage through Iran has been presented as a cost-effective and operational option that would not only give Turkmenistan access to European markets, but also be an important option for Turkey to reduce its dependence on Russian gas.
In addition, the increase in global demand for natural gas and the geopolitical developments in Europe after the Ukraine war have forced countries in the region to review their energy strategies. Turkmenistan, which exported most of its gas to China, is now looking for ways to enter the European market through Turkey. By implementing this project, Turkey is strengthening its role as a regional energy hub. The country has so far tried to obtain diverse gas sources from different countries such as Azerbaijan, Russia and Iran, and the arrival of Turkmen gas to Turkey could increase Ankara’s bargaining power against traditional gas suppliers and reduce Turkey’s dependence on Russia.
On the other hand, Turkmenistan, which is heavily dependent on the Chinese market, is looking to diversify its export destinations. The agreement allows Turkmenistan to use Iran as a transit route and expand its exports to Turkey and, in the future, Europe. Of course, the agreement may not be very pleasant for Russia, as Turkey’s largest gas supplier. Moscow already supplies more than 50 percent of Turkey’s imported gas and uses the TurkStream pipeline to transport its gas to Turkey and Europe.
Although the agreement is currently only for Turkey’s domestic needs, in the future the pipeline carrying Turkmen gas to Turkey could be connected to the European energy grid, which could be detrimental to Russia’s gas share in Europe. Russia is likely to respond by offering special discounts to keep Turkey as its main customer. Moscow may also try to protect its gas interests by pressuring Turkmenistan to reduce its exports to Turkey or by trying to strengthen energy cooperation with Ankara through new projects or the expansion of TurkStream.
On the other hand, the United States has always supported the diversification of its allies’ energy sources and has supported projects such as the Southern Gas Corridor to reduce Russian gas influence in Europe. However, this agreement, due to the use of Iranian territory as a transit route, could present the United States with challenges. Washington has concerns about this, because the passage of this pipeline through Iran could make our country a key player in Europe’s energy supply in the future and also weaken the role of the sanctions imposed by the United States against our country.
The United States will likely work to prevent Iran from strengthening its position in the energy market. Expanding cooperation with Turkey and Turkmenistan in the energy sector to strengthen alternative routes could be another US plan to reduce concerns from Iran.
Khorsand says: “From a geopolitical perspective, this agreement could have a significant impact on reducing US sanctions pressure, especially if the Trump administration revives maximum pressure policies. Iran’s geopolitical capacities in the energy sector could act as a factor in reducing the impact of sanctions and creating alternative routes in the country’s international trade.”
Iran, as a transit country for this pipeline, can gain many economic and political benefits from this agreement; receiving transit rights and increasing regional influence will be among the main benefits of this agreement for Tehran. Iran can also meet some of its domestic needs by receiving Turkmen gas and supplying it to Turkey. This gas swap model has already been implemented between Iran and Turkmenistan and may be implemented in this agreement as well.
If Russia feels that it is losing its strategic geopolitical and geo economic positions in the region, it may accelerate the investment process to complete Iran’s transit corridors.
Khorsand believes that this agreement could give Iran an important competitive advantage over Russia. In recent years, excessive discounts that Russia has offered on energy supplies have reduced Iran’s share in regional and global markets. In this context, the implementation of this agreement, while solving the problems of gas supply to the northern regions of the country and increasing domestic satisfaction, will allow Iran to gain a better competitive position against Russia, which is one of the traditional players in the world energy market. Also, in this way, the Islamic Republic of Iran can pursue peaceful competition with Russia within the framework of the international system and consolidate its position in the energy market. This agreement could also increase Russia’s willingness to invest in the development of Iran’s transit infrastructure. If Russia feels that it is losing strategic positions in the region geopolitically and geo economically, it may accelerate the investment process to complete transit corridors and strengthen Iran’s geopolitical position.
Turkey and Turkmenistan will do their utmost to implement the agreement, given its economic, geopolitical, and strategic benefits. However, obstacles such as possible Russian reactions, US sanctions against Iran, and infrastructure problems may slow or disrupt the process. How the agreement is implemented and its political and economic obstacles are managed will determine to what extent the project can strengthen Turkey’s role as a regional energy hub, transform the future of Turkmenistan’s gas exports, and establish Iran as a reliable route for energy transit.”
At technical level, the possibility, described in the article, of implementing a gas “swap” for the northern regions of Iran could be in fact beneficial, as it is a system already implemented between Iran and Turkmenistan. Also the potential benefits coming for Iran from being a “reliable route for energy transit” should be considered.
Beyond the mentioned benefits in the short, medium term, I guess the real aim for Teheran in the longer term – and this is clearly mentioned in the Javan article – is the possibility of strengthening its geopolitical position remaining a player in the discussions concerning the regional energy routes to Europe.
There are many obstacles in the way.
Not only the expected opposition from USA, but also from Russia, the main energy competitor with Iran and the main gas supplier for Turkey. At a moment when Teheran needs russian support due to the “maximum pressure” pushed by the Trump administration, this file has to be managed carefully as the article suggests.
Moreover, at a moment when Iran and Turkey are not perfectly aligned on the Syrian file, it is likely that Teheran does not see with particular eagerness Turkey becoming a regional energy hub at a time when its room to manoeuvre is limited by the international santions.