Coming soon: an OPEC for Gas?

MOSCOW – Russian President Vladimir Putin’s proposal to set up an energy club within the Shanghai Cooperation Organization, voiced at the SCO summit in Shanghai, has been met with alarm in the West.

Concerns have been expressed that a gas analogue of OPEC may appear in the East. There are reasons to believe this is true. The SCO’s oil resources are not overly significant: even with Iran, which has observer status within the organization, they do not exceed 20% of the world’s total. The situation with gas is different: the gas reserves of Russia, the Central Asian states, and Iran make up more than 50% of the world’s proved reserves. Iran’s proposal to determine gas prices and principal transportation routes together with Russia only added oil to the flame.

Is Russia really trying to set up an OPEC analogue within the SCO? Hardly. First of all, it is now too busy supplying energy westwards. It has quite a few long-term contracts, and their number will grow.

Secondly, setting up an OPEC analogue is difficult from political, economic and organizational points of view. Russia is hardly willing to assume such a burden, even despite its leading role in global gas supplies.

RIA Novosti