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Gazprom, Russia's state-controlled gas monopoly, supplies roughly two-thirds of Central Europe's natural gas. This constrains competition and fosters concerns in the region about Russian political and economic influence. Iran, sitting atop the world's second-largest gas reserves, is Gazprom's natural competitor. The Iranian government's pursuit of the atom and support of nasty groups in the Middle East suppresses this competition. Still, Iran hopes to supply the European market with natural gas in the near future. And European officials have for some time desired to import Iranian gas. This coalescence of interests should be leveraged in support of the West's negotiating position with Tehran. To be blunt, European gas markets should be offered as a carrot.

Under the right circumstances, Iranian gas could one day reach Central Europe via the Nabucco pipeline - a planned gas conduit sponsored by Brussels and Washington that avoids Russia. The Nabucco consortium is having difficulty pinning down sufficient gas supplies, and the Iranians have expressed an interest in supplying the pipeline. Liquefied natural gas (LNG) is the other option for getting Iran's hydrocarbons to European consumers. Poland or Hungary, for instance, could access Iranian LNG via proposed terminals in the Baltic and the Adriatic.

To be sure, there are no guarantees that Tehran will go for these carrots. But if the United States and Europe make an earnest effort, then at least they can say with confidence that no avenue was left unexplored.

At present, U.S. policy complicates the use of energy carrots in dealing with Iran. The threat of unilateral sanctions - applied extra-territorially to non-American companies - is brandished to make foreign (mostly European) firms to think twice about doing business in Iran's energy sector. Congress is also considering a ratcheting up of sanctions legislation. Though American officials support new pipelines like Nabucco, they have also said this support would be withdrawn if Iran is the named supplier. Because of U.S. pressure, Central Europeans could forego their Iran option entirely.

Long-term, of course, Iran will probably become a net-exporter of gas regardless of U.S. sanctions. Energy markets are tight, and demand for natural gas is growing, suggesting it to be only a matter of time before the country's gas deposits make it onto international markets. In practice, unilateral sanctions seem to encourage Chinese energy companies to fill the gap. Though the "China option" is not ideal from Iran's standpoint (Chinese firms lack the sophisticated technology of Western oil and gas majors, and Iranian gas interests have their eye on European customers), Iran will have little choice but to look eastward if cut off from Europe's lucrative markets.

From a U.S. perspective, there's a strong case to be made that it's better to let Iran's gas flow to America's friends than to its rivals. U.S. leverage over China is limited, and it's maybe wiser to let the Mullahs sell to those whom Washington can sweet talk when necessary. It also makes sense to help U.S. allies in Central Europe diversify their energy imports. Indeed, if Gazprom is allowed to pursue a policy of "divide-and-conquer" with individual EU customers, should not the Central Europeans be able to balance two producers (Iran and Russia) off one another? For these reasons, the United States should consider dropping its opposition to Western gas deals with Iran as part of a broader package of incentives to entice the Iranians to cooperate.

Ironically, right when Central European capitals support U.S. plans for a shield to counter Iranian missiles, the Islamic Republic could offer some in the region a shield against Russian monopoly power. U.S. and European diplomats must seize the opportunity to set up a win-win for all sides, help diffuse the nuclear standoff and bolster European energy security in one fell swoop.

Ryan R. Miller is a research analyst with the Center for European Policy Analysis (CEPA) in Washington, D.C.