Non-OPEC nations gain power on energy front

If gasoline prices have you muttering curses at OPEC during each fill-up, maybe you should just say nyet.

With global oil output barely covering demand, Russia and other countries outside the Organization of the Petroleum Exporting Countries are wielding more sway. They’re affecting the price of oil and everything made from it.

Indeed, when world energy leaders gathered in Houston last week to dissect industry issues, their remarks were translated from English into only two other languages — Russian and Chinese.
Critics cite the Kremlin’s efforts to gain more control over oil and natural gas projects that involve major outside oil companies, such as Exxon Mobil Corp. and Royal Dutch Shell. They also point to a January dispute between Russia and Belarus over oil taxes that led to a cutoff in the flow of crude oil through a pipeline serving European customers. And a year earlier, natural gas producer OAO Gazprom cut off supplies to Ukraine because the two nations couldn’t agree on price — a disruption that also affected exports to Europe.

“Russia uses energy now because that’s where it has strength,” said Elena Herold, a strategist at Washington-based PFC Energy and an expert on Russian energy issues. “That’s why whenever the U.S. says something unpleasant about Russia or to Russian officials, Russian officials in response become kind of nasty about their ability to cut off supplies here and there…. It’s paranoia on both sides.”

Curtailing a large share of its massive oil and natural gas exports, however, is a threat Russia couldn’t afford to carry out, Herold said. Tax receipts from oil and natural gas sales fund about half of Russia’s annual budget, she added.

Los Angeles Times