edge of a new world order

08 | "Minority Report" by Marina Pustilnik
Big Gas Troika


We are sitting on the edge of a new world order these days. The possibility, which for several years has been a subject of fears, gossip and speculation, is finally becoming reality. The world's three largest natural gas nations - Russia, Iran and Qatar - which together control 60 percent of global gas reserves, agreed to strengthen cooperation. Meanwhile, Tehran said there was consensus to set up an OPEC-style group.


Russia's gas export monopoly Gaz­prom said it had agreed with Iran and Qatar to form a "big gas troika" and that it should become a permanent body complete with forums. Gazprom chairman Alexei Miller did not refer to OPEC in his speech. This was done by Iran's Oil Minister Gholamhossein Nozari, who said after the meeting with his colleagues: "There is a demand to form this gas OPEC and there is a consensus to set up a gas OPEC." Gazprom, which is the world's largest natural gas exporter, has been trying to downplay the potential "danger" that the European countries in particular may perceive in this arrangement. "Surely this gathering of gas exporting countries is to give assurances over gas supply to the world," Alexei Miller said, adding: "We have a common vision of the goals of the forum and the need to transform it into a permanent organization as quickly as possible to serve the goals of stable and reliable energy supplies in the world." This did not prevent Miller from adding: "We share the opinion that oil price fluctuations don't put in question the fundamental thesis stating that the era of cheap hydrocarbons has come to an end."

There has already been some reaction to the announcement from the European Commission and the European press. Europe currently imports almost half of its gas supplies from Russia with another sizable chunk coming from Algeria, which also has special relations with Gaz­prom. And while European observers discount Nozari's announcement of a gas OPEC, because they don't believe in production quotas of the sort used by OPEC, they are fearful of another thing - Russia, Iran and Qatar exchanging information about prices, production schedules and investment plans. The European Commission has already announced that it will oppose the creation of any structure that will restrict competition. "The European Commission feels that energy supplies have to be sold in a free market," said its spokesman, Ferran Tarradellas Espuny.

The most interesting question, of course, is qui prodest? Who profits more from this arrangement? Iran, whose current energy infrastructure is so bad that it is forced to import natural gas from Turkmenistan? Iran has been the driving force behind the gas OPEC move, working relentlessly to convince the others. Or is it Russia that will have a chance to somehow control its eager colleagues who are looking for their share of the European market? Russia has been very cautious about putting its name on anything that may once again raise suspicions of unfair play on its part, but it has finally given in, which means the deal sounded lucrative enough to risk the western resentment. Qatar is mostly along for the ride in this case, just by virtue of its largely untapped reserves.

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