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.


The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.

Jim Leaviss

Job Title: CIO Public Fixed Income

Specialist Subjects: Macro economics and fixed interest asset allocation

Likes: Cycling, factory records, dim sum

Heroes: Brian Clough, Morrissey, Neil Armstrong

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