MOSCOW - A group of gas-exporting states led by Iran and Russia is moving towards creating a formal body similar to the Organisation of the Petroleum Exporting Countries, a Russian daily said on Thursday.| Where's Hugo? More importantly, where's Nigeria? |
The paper noted that a draft charter of the organisation, almost identical to that of OPEC, had been drawn up by Iran last year. Russia has the worldÂ’s largest proven gas reserves, while Iran has the second-largest.
Talk of a “gas OPEC” aimed at coordinating issues such as pricing has contributed to worries among Western countries that they are threatened by over-dependence on gas supplying states. Quoting experts, Kommersant predicted the body was likely to be created, but that strong opposition by the European Union and the United States could limit its influence.
| Take another look at the Stratfor piece we ran yesterday. Now read this item again. Russia and Iran would like to keep Europe and Asia dependent on them for natural gas because it's one way to leverage political power. I'm a bit impressed that the EU could recognize and start to deal with this, especially in a subtle way -- didn't think they had it in them. Building a 'ONGEC' with the ability to set and control world prices for NG would create real problems for Europe, particularly if their current alternative suppliers, the ones they need to wean from the Russians, also join in. So it may be (to the extent that the Stratfor piece isn't total nonsense) a 'wheels-within-wheels' scenario. Russia recognizes the danger to its plan to use NG as a lever on Europe and decides to look for partners. Iran needs the leverage and also needs to push up the price of NG, for the same reasons it wants every dollar possible for oil. And other NG producers could be tempted to leverage a small political investment into a large economic return. Look for a move by Nigeria to join up, since Nigeria produces a lot of NG which it moves as LNG to Europe and the U.S. If that happens, then there's a concerted plan. |