Why Excluding Russia and Iran Is a Strategy Built on Sand
Tariq Saeedi
There is a particular kind of misbelief that afflicts policymakers when geopolitics and energy intersect: the belief that the map can be redrawn by willpower alone, that pipelines can be rerouted by decree, and that the laws of physics and geography will eventually yield to political conviction.
The current global energy order — constructed around the deliberate exclusion of two of the world’s most resource-rich and strategically positioned nations — is perhaps the most elaborate expression of that misconception in modern history.
To be clear: this is not an argument for rewarding aggression, excusing sanctions violations, or rehabilitating authoritarian governments on their own terms. It is something more uncomfortable than that. It is an argument from arithmetic.
The Scale of What Has Been Removed from the Equation
Let us start with the numbers, because they are genuinely staggering when placed side by side.
Russia holds the world’s largest proven natural gas reserves — somewhere in the region of 37–38 trillion cubic metres, representing roughly a fifth of the entire planet’s known gas endowment.
Before 2022, it supplied approximately 40% of the European Union’s natural gas needs. Its oil production, hovering around 10–11 million barrels per day, places it consistently in the top three producers globally, alongside Saudi Arabia and the United States.
Iran, meanwhile, sits on the world’s second-largest natural gas reserves — over 32 trillion cubic metres — and the fourth-largest proven oil reserves, estimated at around 210 billion barrels.
For context, that is more than the entire proven reserves of Iraq, Kuwait, or the UAE individually.
Iran’s production, stunted by decades of sanctions, sits at a fraction of its technical capacity. The International Energy Agency has estimated that under different political conditions, Iran could realistically add 1.5 to 2 million barrels per day to global supply within a relatively short period of ramp-up.
Together, these two countries account for somewhere between a quarter and a third of the world’s total natural gas reserves. No energy transition scenario, no portfolio of renewables deployment, and no combination of LNG terminals and floating storage units makes that figure disappear. It simply shifts the consequences onto someone else — usually the poorest and most energy-insecure populations on earth.
The Geography Cannot Be Wished Away
Resources alone do not tell the full story. The more underappreciated dimension of this problem is territorial and infrastructural — what the industry calls midstream: pipelines, compressor stations, transit corridors, processing facilities, and the critical geography through which energy physically moves.
Russia’s position here is almost geological in its stubbornness. The country spans eleven time zones and sits athwart the natural land bridge between the hydrocarbon-rich basins of Central Asia and the consuming markets of Europe and East Asia. The pipelines that traverse Russian territory — or were built to do so — were not arbitrary choices. They followed the path of least engineering resistance across some of the most challenging terrain on earth. Rerouting them is not a question of political will; it is a question of billions of dollars, decades of construction, and the permanent acceptance of higher costs passed down to consumers and industries worldwide.
The Trans-Siberian corridor, the Yamal pipeline network, the Blue Stream and TurkStream systems — these were not built to give Russia leverage as an afterthought. They were built because the physics of moving gas across Eurasia made Russian territory the obvious solution to an obvious problem.
Sanctions and political rupture have not changed the underlying physics.
Iran’s strategic position is, if anything, even more irreplaceable from a pure geography standpoint. — The country shares land borders with Turkey, Iraq, Afghanistan, Pakistan, Armenia, Azerbaijan, and Turkmenistan. It flanks the Persian Gulf on one side and the Caspian Sea on the other.
Any serious plan to move Central Asian gas westward — to feed South Asian markets or connect to the broader international grid — runs directly through or around Iran.
It was in April 2002, when the then-President Khatami of Iran visited Turkmenistan for the first Caspian Summit. I asked a straight forward question: President Khatami, when the TAPI (Turkmenistan-Afghanistan-Pakistan-India gas pipeline projects) gets moving, the western media starts chanting that it comes at the cost of IPI (Iran-Pakistan-India gas pipeline project). When IPI shows some signs of movement, the same media cries that it will sabotage TAPI. Now that the presidents of Turkmenistan and Iran are in the same room here, could you please tell us whether these two projects are in competition with each other? Will the one come at the cost of the other?
Khatami said that it is absurd to think of TAPI and IPI as competing projects. He said that demand in South Asia for the affordable natural gas is growing exponentially. Even when both TAPI and IPI are in full operation, there would still be the need for more gas in South Asia. For this, he said, Iran would be willing to partner with Turkmenistan to build a third pipeline, combining our gas and feed the markets of our friendly countries in South Asia.
He added that natural gas is an energy resource, and as such it is a basic human right. Energy resources cannot be held hostage to political preferences. The economic viability is the only criteria, he said.
The LNG Substitution Myth
When Europe scrambled to replace Russian pipeline gas after 2022, the answer offered by Washington and Brussels was liquefied natural gas — primarily American LNG, but also Qatari and Australian supply. The diversification has been real. It has also been enormously expensive, structurally fragile, and in several important respects, illusory.
LNG is pipeline gas with a significant energy penalty attached. — The liquefaction process at the export terminal, the cryogenic shipping, and the regasification at the receiving end consume somewhere between 15% and 25% of the energy content of the gas itself. That loss does not appear in the geopolitical talking points, but it appears in every energy balance sheet and ultimately in every consumer’s bill.
Europe has spent tens of billions of euros building or repurposing regasification terminals in a compressed timeframe — a process that has, to its credit, moved with unusual speed. But the capacity has been built for gas that trades at a structural premium to pipeline supply, because LNG markets are global and competitive in ways that bilateral pipeline arrangements are not.
European industry, particularly the chemical sector, ceramics, glass, and the energy-intensive manufacturing base of Germany and the broader Rhine-Ruhr corridor, is operating at a persistent cost disadvantage relative to competitors in regions with access to cheaper energy.
Several major chemical plants have already closed or relocated. These are not temporary adjustments. They are structural relocations.
The deeper problem with the LNG substitution narrative is that it is premised on American export capacity that is itself constrained, Qatari supply that was already largely committed, and a global LNG market that developing economies — Bangladesh, Pakistan, Sri Lanka — simply cannot afford to compete in when prices spike.
The energy security of the wealthy OECD nations has been partially stabilized at the direct expense of energy access in the developing world. This is not a conspiracy; it is the mechanical outcome of removing large volumes of lower-cost supply from a global market and replacing it with higher-cost alternatives that flow to whoever pays most.
Iran: The Artificially Suppressed Wild Card
The Iranian case deserves particular attention because it represents perhaps the single largest volume of deliberately withheld energy supply in the world today.
Sanctions on Iran’s oil sector have been in place in various forms since 1979, with significant tightening in 2012 and again from 2018 onward under the maximum pressure policy. The effect on global supply has been meaningful — Iranian production has fluctuated between roughly 1.5 and 3.8 million barrels per day depending on the sanctions environment, against a technical capacity that some analysts place as high as 5 million barrels per day with appropriate investment.
That gap — the distance between what Iran produces under sanctions and what it could produce under normal investment conditions — is not a niche technicality. In a global oil market that operates on thin spare capacity margins and where a 1 million barrel per day swing can move prices by $10 to $20 per barrel, the artificial suppression of Iranian supply is a permanent inflationary pressure on every oil-importing economy in the world.
The gas picture is even more striking. Iran’s South Pars field — shared with Qatar, which developed its side as the North Dome — is the single largest natural gas field ever discovered.
Qatar has built an entire export empire and sovereign wealth fund on its share of that field.
Iran’s side remains massively underdeveloped, not because the gas is not there, but because the investment climate created by sanctions has prevented the capital and technology transfer necessary to develop it. The global gas market would look structurally different — more supplied, less volatile, more accessible to poorer consumers — if that gas were flowing.
The Reintegration Question: What “Fair” Actually Means
None of this implies that reintegration should happen unconditionally, immediately, or without regard for the political and legal realities that produced the current situation.
Because of a complete set of natural and manufactured perceptions, there are real constraints.
But the current trajectory — an extended, indefinite exclusion of both countries from normal participation in global energy markets — rests on the implicit assumption that the rest of the world can absorb the supply and infrastructure gap without serious consequence.
That assumption has already been tested and found wanting.
Energy poverty in the Global South has deepened. European deindustrialization has accelerated. Global LNG prices have structurally increased the cost of the energy transition in developing economies, because gas is not only a fuel — it is frequently the bridge fuel that makes the early stages of a grid transition financially manageable.
“Fair reintegration” does not mean pretending that nothing happened. It means constructing frameworks — phased sanctions relief, supervised production agreements, multilateral oversight mechanisms — that allow the supply to re-enter global markets in ways that serve broad interests rather than narrow ones. It means treating energy access as the humanitarian and developmental imperative that it is, rather than as a subordinate variable in a geopolitical chess game.
The history of energy sanctions offers some instructive precedents. The Iran nuclear deal of 2015, whatever its eventual fate, produced a measurable reduction in global oil prices within months of Iranian supply returning to market. The effect was global and democratizing in the most literal sense: it reduced the cost of energy for every net oil-importing country on earth.
That outcome was not an accident of timing. It was arithmetic.
The Hard Conclusion
There is a version of the current global energy order that is coherent and defensible: it is one where the exclusion of Russia and Iran is acknowledged as costly, accepted as a temporary price for political objectives, and accompanied by serious efforts to cushion the impact on the most vulnerable. — That version, if it existed, would be honest.
The version that actually prevails in most policy discourse is different. It presents the exclusion as essentially costless — managed by the miracle of LNG diversification and renewable acceleration — and treats the idea that global energy security requires the full participation of the world’s second and third largest gas reserve holders as naive or morally compromised.
That version is not honest. — It is wishful thinking wearing the clothes of strategic seriousness.
The world’s energy map is not a political document. It is a physical one. And the physical reality is this: two countries that together hold roughly a third of the world’s natural gas, whose territories form the natural transit corridors of Eurasian energy, and whose production capacity represents the single largest pool of suppressed global supply, are sitting outside the system that the system desperately needs them to be part of.
That will not be resolved by willpower. It will not be resolved by more LNG terminals. And it will certainly not be resolved by continuing to pretend that the map looks different from how it actually does.
The conversation about the reintegration of Russia and Iran in the global energy mix — difficult, politically treacherous, morally complicated — is not optional. It is overdue. /// nCa, 28 April 2026