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December 2008
Next Big Things
Next in: Energy
The new Opec
The EU and the US are getting hot under the collar at the prospect of Russia, Iran and Qatar forming an OPEC-style cartel for natural gas following the first of several planned meetings in Tehran between the three countries, which together account for 60% of the world’s natural gas reserves.
A gas cartel to determine supply and influence prices could extend Iran and Russia’s influence in politics as well as energy, particularly if oil prices rise again – prompting politicians, businesses and consumers to look toward natural gas and other alternative fuels. The 27-nation EU depends on Russia for nearly half of its natural gas imports. Moscow, which controls many of the European pipelines delivering gas from Russia and Central Asia, already has a grip on supplies. Iran, in its standoff with world powers over its nuclear programme, has threatened to block oil shipments through the Persian Gulf.
Analysts say a natural gas cartel that resembles OPEC would not have the same impact on prices as OPEC has on oil. But it could still enable gas-producing countries to wield more influence on world prices, particularly in Europe and Asia. Plans for a gas cartel are also anticipating a future in which global crude supplies will become scarcer and more expensive. Liquefied natural gas – a rapidly growing segment of the market – is already traded as a commodity similar to oil because it can be shipped around the world in special tankers.
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