A Gas OPEC in the making?

In early 2007, the Leader of the Islamic Revolution in a meeting with the then Security Council chief of the Russian Federation, said as half of the known gas reserves of the world exist in Russia and Iran, the two countries should lay the foundation for a gas organization similar to the Organization of Petroleum Exporting Countries (OPEC). Today the world has come to acknowledge the importance of what is being known as Gas OPEC. The importance of the decision made by the three leading natural gas producers in the region (Iran, Russia, and Qatar) can be better understood when compared to the history of OPEC.  This development, more than anything else, is reminiscent of the atmosphere half a century ago when Iran, Saudi Arabia, Kuwait and Iraq devised the plan for forming OPEC in Baghdad. Later, and subsequent to the oil shock of 1973, OPEC transformed into a key economic player in the East against the West.  Back then, few if any had perceived that OPEC would eventually become king-maker in the global energy market. The truth is that developments in the global energy market in recent years have made establishment of an organization of gas exporting powers an inevitable exigency. Gas OPEC would be an institution for policy-making within the framework of which gas production costs could be lowered through the exchange of technology. At present, the unofficial assembly of gas exporters which was founded in 2001 and which has 15 members controls over 72 percent of global gas reserves. Share of the 15 countries in the current natural gas production in the world is close to 42 percent. Unlike OPEC, which controls less than 45 percent of the global oil supply, it can be said that the organization of gas exporting countries, given members such as Russia, Iran, Qatar and Algeria, would control a large share of the world’s total gas consumption. After the idea of founding Gas OPEC was first floated, America and the European Union (EU) spared no effort to undermine and if possible torpedo the entire project. Westerners have on several occasions claimed that a gas organization would “endanger global supplies and lead to higher prices.“ However, it is obvious that such opposition is rooted in political greed, as the West still wants to determine the direction of the international energy market and decide who gets what!  Despite the fact that senior officials of the new gas body have made it known that it will seek to promote cooperation among member-states, and that it has no need for ’monopolizing“ the market in the same as western cartels do, western consumers continue to express concern over the future of gas supplies in the highly volatile international markets.  This is more so because a point that attracted a lot of international attention regarding the gas group is the fact that regional powers made the move at a time when most financial and economic institutions in Europe and America are broke and would sink completely without government bailouts. The bottom line is that global institutions are responding to the challenges of today’s world pretty slowly. This is something that western strategists have admitted given the decline in the power, influence, and above all efficiency of top financial players such as the International Monetary Fund and World Bank.