Energy

The US’ withdrawal from the JCPOA and declaration of a new set of sanctions has been hard to swallow for those planning Iran’s energy sector, as they had been relying on the deal as a means of revivifying Iran’s oil and gas production capacity

Over the past few decades, the share of natural gas in the global fuel basket has grown considerably. All predictions point to gas becoming the largest source of energy in the world, reaching over 28% by 2035. At present, countries such as US, Russia, Australia have made huge investments aiming to take a higher share of the LNG market.

As a country with a strong dependence on oil and gas imports, Turkey is pursuing a developmental strategy for domestic resources which includes a renewable energy agenda alongside increases in nuclear and coal facilities. Turkey’s growing energy demand make a reliable supply of multiple resource streams a necessity.

NAFTA crisis / New tariffs on Chinese goods / Escalation of conflict between US and Turkey

Energy, mainly from oil exports, is one the main foundations on which Sino-Iranian relations are built. China’s growing economy needs energy from reliable sources, and Iran’s huge oil and natural gas reserves go a long way towards covering the surplus in demand. By 2017, the bilateral volume of trade amounted to around $37.2 billion – massively in China’s favor.

The shale gas revolution had provided the US with an opportunity not only to become energy efficient, but also a natural gas exporter. US interests in energy exports hinges on boosting relations with neighbors and allies. Turkey’s growing economy and equally increasing energy demands make it a good candidate for US liquified natural gase (LNG) supplies. At present, Turkey imports most of its natural gas from Russia, Iran and Azerbaijan.

With the onset of EU/US sanctions on Iran's energy sector, the country’s oil and gas production capacity decreased dramatically. Following the signing of the 2015 Iran nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA), however, is was hoped that the country would be provided with an opportunity to attract more foreign investment, not least that which would allow it to recover its oil and gas production capacity.

Lifting sanctions in the wake of the Iranian nuclear deal opened large opportunities for resource-rich Iran to bring its long-stagnant industry up to date. Most of the oil fields in Iran are in the second half of their production capabilities, with the productivity of wells decreasing by 8% annually.

Key political events of July 2018

Almost all analysts understand that the Middle East is facing a serious drought crisis. Lands which used to be considered the most fertile in history can no longer support life.