Energy diplomacy in a geopolitical dilemma
Role of oil, gas in Iran’s regional, int’l relations
By Masoud Dashti Derakhshan
For more than a century, energy resources have shaped the political identity, economic trajectory, and foreign policy of the Islamic Republic of Iran. With some of the world’s largest proven oil and natural gas reserves, Iran occupies a decisive position in global energy markets. Yet, international actors have often sought to restrict Iran’s ability to fully leverage this strategic advantage through geopolitical tensions and sanctions. Despite these challenges, Iran has transformed energy into both a tool of constructive engagement and a source of resilience. This article examines the role of oil and gas in Iran’s regional and international relations, highlighting the country’s capabilities, strategies, and opportunities.
Iran’s hydrocarbon wealth — second globally in natural gas reserves and among the top four in oil — provides unparalleled potential for influence. These resources have enabled:
• sustainable economic partnerships with Asian and European states,
• attraction of foreign investment in energy infrastructure,
• active participation in OPEC and other international institutions,
• and domestic stability through revenues supporting social programs, subsidies, and infrastructure.
Energy has evolved from a mere commodity into a diplomatic instrument. By managing production levels, joining pipeline projects, and negotiating bilateral and multilateral agreements, Iran has sought to expand cooperation and build strategic alliances. Energy diplomacy thus reflects Iran’s broader foreign policy objectives: safeguarding independence, consolidating regional influence, and resisting coercive policies.
Sanctions as test of creativity, self-reliance
Unilateral sanctions imposed by the United States and its allies have constrained Iran’s export capacity and revenues. Yet these measures have also spurred innovations, such as:
• development of indigenous technologies to reduce reliance on external suppliers,
• strengthened partnerships with China, a reliable buyer and investor in infrastructure,
• and expanded cooperation with Russia and Venezuela to challenge Western dominance in energy markets.
While reliance on a limited set of partners presents short-term challenges, this strategy has safeguarded Iran’s independence and ensured continuity in complex international conditions.
The Persian Gulf — home to the Strait of Hormuz, a vital artery of global oil trade — underscores Iran’s strategic leverage. Iran’s role in the region is defined by:
• commitment to energy security alongside deterrence capabilities,
• gas export initiatives to Pakistan and Persian Gulf States,
• expansion of electricity and gas networks to foster regional integration,
• and active participation in OPEC to balance competition with cooperation.
Despite external interference, Iran continues to promote economic cooperation as the foundation for regional stability.
Iran has pursued long-term resilience through:
• development of South Pars, one of the world’s largest gas fields,
• expansion of petrochemical industries to diversify beyond crude oil exports,
• and establishment of energy corridors linking Central Asia, the Caucasus, and South Asia.
Projects such as the Iran–Armenia pipeline and the proposed Iran–Iraq–Syria corridor reinforce Iran’s role as a secure transit hub, enhancing both national development and regional stability.
Future of Iran’s energy diplomacy
Global energy systems are undergoing transformation, yet oil and gas will remain central for decades. Iran’s vast reserves and strategic geography position it to play a decisive role in shaping the future energy order. Greater integration into global markets — if artificial barriers are removed — would not only advance Iran’s national interests but also contribute to international stability.
Iran’s energy diplomacy rests on three pillars:
• self-reliance in production and technology,
• partnerships with reliable allies to counter external pressures,
• and leveraging domestic capacities to maximize resilience and influence.
By pursuing this path, Iran can transform its energy wealth into a foundation for sustainable development, strategic authority, and equitable global cooperation.
Iran’s energy resources are both a divine gift and a strategic asset. Through resilient diplomacy, the Islamic Republic has demonstrated its ability to convert these resources into instruments of national strength and international engagement. Despite sanctions and external pressures, Iran’s determination to turn challenges into opportunities has ensured continuity and progress. Looking ahead, Iran’s energy diplomacy will remain a cornerstone of its foreign policy — defending national rights while contributing to a fairer and more sustainable global energy system.