Putin: "A gas OPEC is a good idea. We will think about it."
Friday’s Wall Street Journal lead on Putin’s response to Iran’s suggestion that the gas-producing nations set up a cartel similar to that run by the oil producing nations. Russia and Iran have the world’s largest proven gas reserves, with a world share of over 40%. Given that Europe gets a quarter of its natural gas from Russia this is a concern for inflation – the natural gas price is already the single biggest contributor to Eurozone inflation. According to the latest Economist however (see here) such a cartel is unlikely to be effective for various reasons – most importantly the long term nature of gas supply contracts. Nevertheless the "protectionism alarm" is ringing more and more frequently here.
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