LONG talked about, the three biggest players in the global gas game are joining forces to create an Opec-style cartel. This, in turn, will drive up gas prices, especially in Europe.
Iran, Qatar and Russia control 60% of known gas resources, which is easily enough critical mass to call the shots when it comes to managing market prices to their advantage.
Alexey Miller, chairman of Russia’s Gazprom, drove the point home a few days ago by saying that they were forming a “big gas troika” and warned that the era of cheap hydrocarbons had come to an end.
“We are united by the world’s largest gas reserves, common strategic interests and, which is of great importance, high co-operation potential in tripartite projects,” he said.
That troika is already setting up a technical committee comprised of specialists and experts to discuss the implementation of joint projects covering the entire value chain from geological exploration to marketing.
While Miller described the initiative as a troika, Iran came clean by saying that this was going to be an Opec for gas.
The European Commission has already stated that it will oppose the creation of any organisation that could restrict competition. However, it is difficult to see what the EC really can do.
Europe depends on Russia for nearly half of its natural gas imports. Moscow, which controls many of the pipelines from Russia and central Asia, already has a tight hold on supplies.