Iran & India’s energy security

With Iran backing out of its $22 billion contract for supply of liquefied natural gas in ships and also excluding India from the three-nation overland gas pipeline, New Delhi needs to redouble its efforts to ensure energy security to sustain its economic growth rate. The plea that no deal is final till it is approved by the Supreme Council, which can even cancel agreements earlier approved by it, is unconvincing. Iran’s attitude rules it out as a reliable energy supplier in future because no sanctity is attached to bilateral agreements.

While urging India to agree to a much higher price for gas than earlier agreed to and remain prepared for price hikes in future without notice, Iranian Deputy Oil Minister Hosseinian predicted that the oil price would touch $100 a barrel by the end of the year and keep rising.

Asian economies as such are not only facing a booming energy demand and market size in the coming years, but continuing uncertainty of energy security and higher oil prices as well. Integration and cooperation, both in the fields of economy and energy, are the right way to meet and deal with the challenges. It has become necessary for Asian countries to establish an effective mechanism to forge collective action as early as possible. Asia, as a whole, is a giant buyer in the world energy market, but not a strong one. These countries lack an effective collaborative mechanism to search for the common interests to secure stable energy supply and obtain lower prices through strong bargaining.

Most Asian countries are net importers and need to ensure the security, stability and sustainability of oil and gas supplies.

If energy security is not assured, these countries will fail to eliminate poverty completely or deliver social justice to billions of their people. Only Japan is counted out, because it is the world’s number two economy, and boasts of living stands comparable to Western countries. Chinese President Hu Jintao also feels that jointly developing and deepening long term partnership with India conforms to the fundamental interests of the two countries and will contribute to peace and stability in Asia and the world over. .

Central Chronicle