VZCZCXRO7692
PP RUEHBC RUEHDE RUEHKUK
DE RUEHDIR #0002/01 0221209
ZNY CCCCC ZZH
P 221209Z JAN 08
FM IRAN RPO DUBAI
TO RUEHC/SECSTATE WASHDC PRIORITY 0213
INFO RUCNIRA/IRAN COLLECTIVE
RUEHDIR/IRAN RPO DUBAI PRIORITY 0206
RHEFDIA/DIA WASHINGTON DC
RUEAIIA/CIA WASHDC
RHEHAAA/NSC WASHINGTON DC
RUEHDE/AMCONSUL DUBAI PRIORITY 0187
RUEHAD/USDAO ABU DHABI TC
RUEHAD/AMEMBASSY ABU DHABI PRIORITY 0155
RUEATRS/DEPT OF TREASURY WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 02 IRAN RPO DUBAI 000002 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL:  1/22/2018 
TAGS: ECON ENRG EPET PGOV PREL IR
SUBJECT: AHMADINEJAD AND OIL MINISTER TAKE THE HIT FOR GAS SHORTAGES 
 
REF: A. ANKARA 0035; B. ASHGABAT 0007; C. ASHGABAT 0075 
 
RPO DUBAI 00000002  001.2 OF 002 
 
 
CLASSIFIED BY: Ramin Asgard, Acting Director, Iran Regional 
Presence Office, Department of State. 
REASON: 1.4 (d) 
 
1.(C) Summary:  Due to gas cuts from Turkmenistan, northern and 
northwestern parts of Iran have been facing gas shortages since 
December 29; which in turn has forced Iran to cut its gas 
exports to Turkey (reftels).  The Guardian UK reported 22 
January that at least 64 Iranians have died due to gas shortages 
in freezing temperatures.  Iranian political and economic 
analysts initially joined the government in blaming Turkmenistan 
for their woes, claiming that Turkmenistan is looking to secure 
a higher price for its gas.  After more than 3 weeks of 
persistent shortages, however, blame has shifted to the Oil 
Minister and President Ahmadinejad, with the Supreme Leader 
siding with the Majles and forcing the government to provide gas 
supplies from emergency gas funds.  President Ahmadinejad is 
taking a significant political hit for his initial refusal to 
dip into emergency reserves for northern Iran which is suffering 
from a particularly cold winter and record snowfalls.  The 
longer the shortages persist during the winter months, the less 
popular Ahmadinejad will be in the northern provinces.  End 
Summary. 
 
Turkmenistan cuts its gas supplies to Iran 
 
------------------------------------------ 
 
2.(U) Managing Director of the National Iranian Gas Company 
Seyed Reza Kasayeezadeh announced December 30 that as of 1030 
December 29, Turkmenistan had halted its gas exports to Iran. 
Kasayeezadeh called on Iranians to temporarily curb their 
consumption in a bid to make up for the shortages felt most 
significantly in northern Mazandaran province.  Kasayeezadeh 
confidently asserted that gas imports would resume within 24 
hours, as Turkmen officials blamed "repair and maintenance 
operations" for the "temporary" halt of gas supplies to Iran. 
 
3.(U) In the face of gas shortages Iran, in turn, reduced its 
gas exports to Turkey by 75% January 1 and then cut them off 
completely January 7.  Embassy Ankara reported January 8 that 
according to press reports, Iran said it had no choice but to 
cut off its supplies to Turkey to make up for its own domestic 
shortages due to the Turkmenistan losses (ref A). 
 
4.(U) Over three weeks into the cuts, the Guardian UK reported 
22 January that at lest 64 people have died in Iran due to the 
gas shortages in the freezing winter temperatures. 
 
Blame shifts from Turkmenistan to IRI government 
 
--------------------------------------------- ---- 
 
5.(C) One Iranian political and economic analyst, in a 14 
January industry publication, echoed other reports that Iran 
believes the reason for the halt is an attempt by Turkmenistan 
to secure a higher price for its gas.  According to the analyst, 
Turkmenistan's move has led to an impasse between the two 
countries, with Iran's oil minister refusing to hold talks on 
the issue until Turkmenistan resumes its exports, while Turkmen 
officials are refusing to talk until Iran pays higher prices for 
its gas imports. (Note:  According to RFE/RL Iran is currently 
paying Turkmenistan $75 per 1,000 cubic meters, while Turkmen 
officials are asking for $140.  Asian news sources reported 21 
January that China just signed a deal to import natural gas from 
Turkmenistan at $195 per 1,000 cubic meters.  Endnote) 
 
6.(U) Continued shortages and mounting death tolls are forcing 
Iranians to look at internal fixes instead of blaming 
Turkmenistan for its woes.  Rooz Online reported 21 January that 
Oil Minister Nozari was called before the Majles to answer to 
the shortages.  Guardian News UK reported 22 January that 
President Ahmadinejad suffered a "serious blow" after Ayatollah 
Khamenei sided with the Majles, requiring him to supply the 
villages suffering from power cuts with cheap gas.  The Supreme 
Leader ordered the enactment of a law requiring the government 
to provide $975 million worth of gas supplies from emergency 
reserve funds.  Ahmadinejad had reportedly initially refused to 
implement the bill, accusing the parliament of exceeding its 
powers in passing the legislation. 
 
7.(C) Comment:  President Ahmadinejad stands to be the biggest 
loser in this latest energy shortage.  His political backing 
comes largely from the provinces, not the capital.  The longer 
the northern provinces suffer from gas shortages during the cold 
 
RPO DUBAI 00000002  002.2 OF 002 
 
 
winter, the more unpopular Ahmadinejad will become in the run-up 
to the March parliamentary elections.  This could have a 
negative impact on candidates seen as aligned with him.  It is 
also noteworthy that the Supreme Leader publicly criticized 
Ahmadinejad for the first time on such a sensitive issue, as he 
has long expressed public support for the President. 
 
8.(C) Comment continued:  The irony that Iran is suffering gas 
shortages and needs to import gas even though it is home to the 
second largest gas reserves in the world, has not escaped the 
attention of the Iranian public.  With the population calling 
for gas to remain within Iran it will be difficult for Iran to 
make good on its promised exports until it receives foreign 
investment and technology in the natural gas sector. 
ASGARD