It’s an ongoing debate.  Is the threat of an OPEC-like natural gas cartel being bandied about by the Gazprom for real, or just all talk?  It’s not about whether the exporting countries are willing to form a new series of practices to manipulate prices, but rather how successful they could possibly be in controlling a commodity as difficult as natural gas.  We’ve published opinions on both sides, and this latest item from Warren Wilczewski, a researcher at the Carnegie Council, in the Journal of Energy Security points toward the negative.

The general dynamics of the LNG market suggest a cartel may be much more difficult to put together than is feared. Russia, dominant in Europe, may benefit from a short-term respite in competition over European market share, yet with over a quarter of the world’s gas reserves it is bound, in due time, to seek a larger presence there and in other regions. Iran currently plays a negligible role on the international gas market, while Qatar, at 9.2% of world’s gas reserves, accounts for less than 2% of international gas production. OGEC would therefore need to be structured in a way that reflects not only current production but also allows for Iran and Qatar to capitalize on their reserve base by ratcheting-up production and market-share over time. Otherwise, any cooperation on price or production levels would at most be a “cessation of competition,” quickly recognized by smaller members as an attempt to throttle their revenues and ambitions.