If you’ve been following my blog, you’ll know that I’ve been knee-deep in researching the energy ties in Central Asia. This area has become a hot bed for investment and news is swirling around just how much natural gas is in this region.

Let me spell it out for you: Russia ships nearly two-thirds of all its natural gas production to Europe, and one Central Asian country, Turkmenistan, helps fulfill its contracts.

But if Central Asia countries start making deals with Europe over Russia, Russia will be left out in the cold.

I don’t think that’ll happen though. You see, Russia’s got a contingency plan. It just met with Iran and Qatar to firm up an energy deal.

First let me explain the tug of war…

The Caspian Sea energy nations met last Friday in Azerbaijan. At the top of the list for discussion was the signing of a declaration to limit Russia’s monopoly over export routes to Western Europe. Now, results showed that there are some countries unwilling to sign the declaration, but the fact that a declaration was even up for discussion is promising for some.

This is big news particularly for the European Union.

For years now, the EU has imported 40% of its natural gas from Russia. These imports make up 25% of the EU’s total natural gas consumption. Those are extremely high numbers and the European Commission wants to do something about it.

“This is a problem we must address. We must shield European citizens from the risk that external suppliers cannot honor their commitments,” EU Commission President Jose Manuel Barosso told reporters from RussiaToday.

We all know that Russia is more than willing to turn of the tap. With Russia as the single largest supplier of imported gas, the EU is seeking diversity in its energy imports. RussiaToday notes that this will be accomplished a number of ways, from opening up a new North Sea offshore grid to new projects in the Mediterranean.

So where does that leave Russia?

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Over the past several months, the investment world has turned its ever-roving eye on the Middle East and North Africa.

Since July, four new exchange traded funds have hit the market focusing on these regions. They are the WisdomTree Middle East Dividend Fund (GULF:Nasdaq), the Market Vectors Gulf States Index ETF (MES:NYSE), PowerShares MENA Frontier Countries Portfolio (PMNA:Nasdaq), and the SPDRs S&P Emerging Middle East & Africa ETF (GAF:AMEX).

But the one thing lacking in these ETFs is investments in Iran.

Of course, the U.S. has decreed it will not make investments in Iran, who it considers a state-sponsor of terrorism. That’s nothing to fool around with.

While much of the Western world stands firm by not investing in Iran, other nations, like China and Russia aren’t quite as righteous. Russia has repeatedly stood against strong sanctions in response to Iran’s nuclear program… as has China, but for different reasons. Iran and Russia have a history that goes back to before the Cold War. But China…

Iran is the world’s fourth largest oil exporter, and China, in early December 2007, signed a $2 billion deal with the country to secure oil supplies.

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