Russia and Iran Ponder an OPEC-Like Natural Gas Cartel

by: SA Eli Hoffmann

Wall Street Journal reports that Russia and Iran, who jointly own almost 1/2 of the earth's natural-gas resources, are contemplating forming an OPEC-like cartel -- a move that could unsettle energy markets. NG accounts for a growing share of global energy use, but thus far producer nations haven't worked together to influence markets. Speaking yesterday at his annual press conference in the Kremlin, Russian President Putin called the notion, suggested by Iranian leader Ayatollah Ali Khamenei, "an interesting idea." But he downplayed the price-fixing rationale for any alliance, saying, "We do not intend to set up a cartel, but I think it's right to coordinate our activities." The idea threatens European nations, who get about 1/4 of their NG from Russia, more than U.S. consumers who get most of theirs from within North America. Russia's interest in pooling its gas supply is unusual considering it never even joined OPEC, despite being the world's #2 oil exporter.

Sources: Wall Street Journal
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