Russia Pushes for Agreement over Gas Cartel along OPEC Lines

Top officials in Europe and America are watching nervously to see whether Russia succeeds in forging an Opec-style "gas cartel" at gathering of the world's leading gas exporters in Qatar today.

Algeria, Iran and Venezuela all appear to back Putin's bid for a 'gas cartel' The once-sleepy Gas Exporting Countries Forum has become the stage for a dramatic bid by Russian President Vladimir Putin to dominate the global energy agenda. The EU energy commissioner, Andris Piebalgs, warned that Europe will retaliate against any attempt to rig the market or hold European consumers to ransom." Gas could be replaced. If gas is not traded in open markets, I would advise all member states and I will do everything I can to make more investment in nuclear power," he said.

In Washington, the top Republican Ileana Ros-Lehtinen, described the proposed cartel as a "global extortion racket".

Qatar's foreign minister, Mohammed al-Roumaihi, left no doubt that the proposal was a Kremlin scheme. " The idea of a gas Opec is above all political. It was suggested by President Putin, whose country has specific strategic objectives," he said. Russia's energy minister, Victor Khristenko, insisted the world had nothing to fear from moves to streamline rules in the gas market.

"I know this is causing a lot of tension, sometimes exaggerated, sometimes wild. Are we going to sign up to a gas price policy? Of course not," he said. Leonid Grigoriev, president of Russia's Energy Institute, said Mr Putin was stoking fears as part of bargaining strategy in gas export deals. "

These references to a cartel are made deliberately. They are expected to frighten the West, and they do," he said.

It is unclear how a gas cartel would function given that most contracts are taken out on very long delivery schedules of 15 years or more, unlike the liquid spot market for crude.
Algeria, Iran and Venezuela all appear to back Mr Putin's ideas for a "gas Opec", but the scheme would lack bite without the full support of pro-Western Qatar.