For Russia, Iran’s return to the world oil market is a boon, not a threat

Iran’s reentry into the global energy market has been marked with the formation of a new level of strategic cooperation with Russia, UK-based energy consultant Mehrdad Emadi says; instead of becoming a competitor for Moscow, Tehran has become an important partner. This, analysts suggest, has important geopolitical implications.

On Wednesday, Iran joined in on a proposal tabled by Russia, Venezuela, Saudi Arabia and Qatar to freeze oil production following a ministerial meeting on the issue.

The news, which resulted in Brent futures rising by over 7% to nearly $35 a barrel, followed on reports over the weekend that Iran had begun the delivery of four million barrels of oil to Europe, with three massive oil tankers setting sail out of Iran for European ports. That move came after news last month that Europe and the United States would lift sanctions against Tehran following an agreement on the country’s nuclear program.

The crude, it was noted, was delivered to French, Spanish and Russian oil companies, including Litasco, a subsidiary of the Russian oil giant Lukoil. The oil sold to the company was delivered to a refinery of the Russian-owned Romanian refining company Petrotel.

Speaking with Azerbaijan’s Trend News Agency, Mehrdad Emadi, a consultant at the UK-based BetaMatrix International Consultancy, suggested that contrary to some oil experts’ expectations that Iran’s reentry into the global energy market would harm Russia’s prospects by putting a further damper on prices, its entrance has, on the contrary offered Moscow major benefits on a strategic level.

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