Opportunity made by politics

 

By now, we all know (or should know) about the global problems the advanced world has with Iran. Recently, further sanctions were placed on that country because they are trying to build nuclear weapons and are evading international pressure to stop. The sanctions that have been recently passed by the UN Security Council, plus some unilateral sanctions some individual countries have placed are making it harder and harder for Iran to import various types of goods.

Adding to Iran’s difficulties, the infrastructure with regards to oil and gas for its own citizens is very poor. It is a country with a huge reserve of both energy sources but still relies on imports due to awful management and development policies for refinement capacity. Many companies have stopped shipping oil to Iran; most recent of these companies is Total, the French- based oil company. Natural gas shipments have seen similar outcomes.

However, not all countries are on board with these sanctions. Some countries, particularly developing or underdeveloped nations see some real potential with filling the holes in supply to the Iranian market which have been left by many companies. These countries are less worried about backlash from the U.S. and others because, let’s face it, they don’t have too much going in terms of business and trade that can be taken away. A perfect example of this is Iran’s neighbour on its northwest border, Turkmenistan. This former Soviet nation was already supplying Iran with about 8 billion cubic metres annually of natural gas, according to Reuters, but recently signed a contract with Iran to increase that to 14 billion.

There is no word on which company or companies this supply would be replacing, but it seems obvious that Turkmenistan is capitalizing on another company’s loss of business due to politics. Don’t get me wrong, I support the sanctions and think it is a necessary evil to prohibit companies from doing business with them at the moment, but still, it just sucks if you are one of those companies that can no longer sell to a particular market for no reason other than politics. I guess that’s the cost of doing business internationally. However, if you are in Turkmenistan then you are looking at what else you can supply the Iranian market where there is demand that is going unmet due to these sanctions. It turns out that even in weird situations like these, one country’s loss is another’s gain.