It has been recently informed by a senior Iranian official that the National Iranian Oil Company (NIOC) has cancelled its gas contract with UAE-based Sharjah’s Crescent Petroleum. This contract was for exporting natural gas to the UAE and it had been into a dispute regarding the supply of Iranian gas.

The end of this 25-year contract was announced by the head of NIOC on Saturday. This deal was signed in the year 2001. Iran is known as a major crude exporter and has the world’s second largest natural gas reserve, first in the list being Russia. But in recent times, due to troubles in accessing Western technology due to certain sanctions, development in this field is being obstructed.

According to Javad Oji, the head of NIOC and also Iran's Deputy Oil Minister, the contract is no more valid and that after this collapse, the new policy of the oil ministry is “direct sale of gas to the UAE Government”.

It was reported by the semi-official Mehr news agency that a leveled price formula has been put in place for the neighboring countries and that this formula will be the base for all negotiations. This new formula, that NIOC has come up with, has been concluded after keeping in mind the very basis of oil and oil-derivative prices.