Iran still controls one of the best available routes for transporting Turkmenistan’s gas to Western markets, but if it fails to capitalize on this opportunity, Central Asian gas could eventually be transported through alternative routes.
According to Mehr News Agency, Turkmenistan is redesigning its gas export strategy. Although the shift appears to be primarily related to Ashgabat’s energy policy, it could have significant implications for Iran’s geopolitical position in Central Asia, the Caspian Sea, the Caucasus and Turkey’s energy market.
For more than a decade, Turkmenistan has exported most of its gas to China. However, Ashgabat is now seeking to reduce its heavy dependence on a single customer or export route and pursue a “multi-route” model. China will remain Turkmenistan’s most important gas market, but at the same time, the route through Iran to Turkey, the TAPI pipeline project to Afghanistan, Pakistan and India, and the Trans-Caspian route to Azerbaijan and Europe are also being pursued.
This development represents both a threat and an opportunity for Iran.
Iran is the only neighboring country of Turkmenistan that can transport the country’s gas overland directly to Western markets. Iran’s extensive gas network, its connections to Turkey and Iraq, and the possibility of using swaps instead of direct gas transportation give Tehran an advantage that competitors cannot easily replicate. However, this advantage is not permanent.
In 2025, the transfer of Turkmen gas to Turkey through Iran began under a swap arrangement. The initial volume under the agreement was around 1.3 billion cubic meters.
In terms of volume, this figure is not large compared with Turkey’s gas market, but its importance lies in establishing a new operational route. For the first time, Turkmen gas reached the Turkish market through Iranian territory, demonstrating that the Iranian route could become part of Turkmenistan’s export network.
This could be the starting point for much broader cooperation, provided that Iran can turn the arrangement into a long-term agreement and increase the volume of gas transferred.
If the Turkmen gas swap with Turkey develops into multi-year, high-volume contracts, all three countries would benefit. Turkmenistan would gain a new market, Turkey would diversify its gas supplies, and Iran would not only earn transit revenues but also become an important link in the region’s energy network. The problem arises if this cooperation remains limited to short-term and small-scale contracts.
Iran has also gained important experience in Turkmen gas swaps in previous years. In 2021, Iran, Turkmenistan and Azerbaijan signed a trilateral gas swap agreement, and flows of Turkmen gas to Azerbaijan through Iran began in early 2022.
The agreement had significant geopolitical importance. Iran was able to act as an intermediary for gas transportation between Turkmenistan and Azerbaijan, despite the two countries being located on opposite sides of the Caspian Sea. However, Azerbaijan and Turkmenistan are now deepening their direct cooperation.
The two countries have signed energy agreements in 2026, while discussions on further integration of their energy infrastructure have also gained momentum. If this trend continues, one of Iran’s key advantages — the need to use Iranian territory to transport Turkmen gas to Azerbaijan — could diminish.
For this reason, the trilateral Iran-Turkmenistan-Azerbaijan gas swap should not simply be viewed as an established arrangement; it could serve as a basis for designing new forms of cooperation among the three countries. Although the swap has been suspended or disrupted at times, news reports in 2026 indicate that it has continued at a level of around 5 million cubic meters per day.
Another important opportunity is Iraq. Despite its significant energy reserves, Iraq continues to face difficulties in supplying gas to its power plants and has relied heavily on Iranian gas to meet part of its needs in recent years.
Turkmenistan could become a new source of gas for Iraq, while Iran represents the natural transit route for such supplies. Accordingly, a plan to import Turkmen gas into Iraq through Iran was proposed, with part of the Turkmen gas expected to be transported through Iran’s network under a swap arrangement. However, U.S. pressure and Baghdad’s concerns over sanctions prevented the plan from being fully implemented.
Nevertheless, Iraq’s need for gas remains. Iran should therefore not consider the proposal a closed case. If political and legal conditions change in the future, Tehran should be prepared to reactivate the route. Losing the Iraqi market could mean that the country moves toward alternative sources in the coming years, making it more difficult for Iran to regain its position in that market.
The Trans-Caspian route represents the most significant long-term threat to Iran’s advantage. The project envisages transporting Turkmen gas across the Caspian Sea to Azerbaijan and then through the gas networks of Azerbaijan, Georgia and Turkey to European markets.
The Trans-Caspian project still faces numerous technical, financial and political challenges, and its implementation cannot be considered certain or imminent. Nevertheless, its strategic importance should not be overlooked. If such a route is established in the future, Turkmenistan could gain access to Western markets without transiting Iranian territory.
For Tehran, therefore, the main issue is not when the Trans-Caspian route will be built; rather, Iran needs to consolidate its position before competing routes benefiting Baku and Ankara mature.
If long-term gas swap agreements are established between Turkmenistan, Iran and Turkey, the Iranian route could maintain its position even if the Trans-Caspian project is implemented. However, if Iran fails to act now, it may be forced several years later to compete for a smaller share of a market in which its geographic position currently gives it a potentially more important role.
Some may consider the initial volume of Turkmen gas swapped to Turkey relatively insignificant. However, the real value of such cooperation goes beyond revenue generated from gas transportation. Gas swaps can provide Iran with three benefits: economic revenues, the creation of mutual interdependence, and the consolidation of the country’s position in the regional energy network.
If Turkey and Iraq become dependent on Iranian infrastructure for part of their imports of Turkmen gas, excluding Iran from this network would become costly for them. Therefore, Tehran’s objective should not be limited to collecting transit fees. Iran should seek to become a country through which part of Central Asia’s energy flows are managed. This is also linked to Iran’s broader strategy of becoming a regional energy hub.
Gas swaps should not be viewed separately from Iran’s transit policy. Central Asian countries are seeking diversified routes to access foreign markets. To the west, the Middle Corridor through the Caspian Sea, Azerbaijan, Georgia and Turkey is being strengthened. To the south, Iran can connect Central Asia to the Persian Gulf and the Gulf of Oman.
If Iran can simultaneously expand cooperation with Central Asia in railways, ports, roads, electricity and gas infrastructure, the country’s geographic advantage could be multiplied. Under such circumstances, the Turkmen gas swap would not be an isolated project but part of a broader economic and geopolitical network.
First, Iran should seek to turn the Turkmen gas swap with Turkey into a long-term agreement and increase its capacity.
Second, it should keep the plan to transport Turkmen gas to Iraq alive and be prepared to implement it if political conditions allow.
Third, Tehran should manage its energy relations with Turkmenistan and Azerbaijan in a way that ensures Iran remains part of the regional energy network even if direct connections between the two countries expand.
Fourth, energy diplomacy should be linked to the development of the North-South Corridor and Central Asia’s access to Iran’s southern ports