C Asia Eyes Iran As Oil Export Route

Oil-rich but landlocked, Central Asian republics desperate to get their crude to market see an export route through Iran blocked by Tehrans ice-cold ties with the West.

Tehran-based diplomats agree that Iran is well-placed to form a bridge for Central Asian energy exports, but say its politics scare off the billions of dollars in investment needed to back its dreams of being a player on a new Silk Road.

Iran is strategically well-placed to transport oil and function as a regional hub, said one Western diplomat. But its political situation makes it a bit of a regional black hole.

US sanctions against Iran, imposed for Irans alleged backing of terrorism a charge Iran denies have precluded any US firms from developing an export route.

 

US sanctions and cool political ties with Europe had limited many European oil companies room for manoeuvre, another diplomat said. Sanctions have kept the multinationals guessing, he said. Swaps offer some flexibility but not for the large volumes of oil people are talking about from Central Asia and Azerbaijan.

The diplomats and Iranian officials said there was little chance of an early thaw in Washington-Tehran ties, as implied in some recent media reports.

We do not need the US and are not prepared to have any dialogue unless the behaviour of the United States changes, Irans Deputy Foreign Minister Mahmoud Vaezi told Reuters late on Monday. Iran, which lies between the remote deserts and steppes of Central Asia and the Gulf, is pushing its geographical position hard to strengthen ties with former Soviet neighbours.