Iran is considering the possibility of exporting gas to Europe, an oil ministry official said on Sunday amid soaring energy prices due to Russia’s war in Ukraine.

“Iran is studying this subject but we haven’t come to a conclusion yet,” deputy oil minister Majid Chegeni was quoted by the ministry’s official Shana news agency as saying.

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“Iran is always after developing energy diplomacy and expanding the market,” he added.

Although Iran has one of the largest proven gas reserves in the world, its industry was hit by US sanctions that were reimposed in 2018 when Washington pulled out of a landmark nuclear deal between Tehran and the United States. world powers.

Talks to revive the 2015 nuclear deal began last year in Vienna, but have been on hold for weeks due to outstanding issues.

Russia’s invasion of Ukraine in February sent global oil and gas prices skyrocketing, with many European countries relying on energy imports from Russia.

The situation escalated on Wednesday when kyiv said Russia had cut off gas supplies through a key transit hub in eastern Ukraine, stoking fears Moscow’s invasion could deepen a crisis. energy in Europe.

Last year, the European Union received around 155 billion cubic meters of Russian gas, representing 45% of its imports.

Iran’s deputy oil minister also confirmed that Tehran and Baghdad signed a memorandum of understanding a few weeks ago that will see the Islamic republic increase its gas exports to Iraq.

“Iran’s gas exports have increased and in this memorandum it was stated that Iraq’s $1.6 billion debt to Iran would be paid by the end of May,” Chegeni added. .

Despite sizable gas reserves, low investment due to decades of war and sanctions has left Iraq dependent on imports from its eastern neighbor for a third of its gas needs.

US sanctions on Iranian oil and gas, however, have complicated Iraq’s payments for imports.

Baghdad is using a complex payment method to comply with an exemption from US sanctions on Iran. Iraq is not allowed to simply hand over money to Iran, as the payments must be used to finance imports of food and medicine.

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