Russia wants to conclude a global deal with the world’s leading miners of the gas and to create a organization on the example of the oil OPEC. In the opinion of management of the Ministry of energy, it is necessary to normalize the situation with the prices on “blue fuel”, which sagged noticeably in recent months.
the idea of creating a gas cartel like OPEC (Organization of countries-exporters of oil), one after another announced in recent days, energy Minister Alexander Novak and his Deputy Anatoly Yanovsky. They both spoke about the need to ensure stability in the global gas market. The stability of this, on a plan of officials, can bring a global agreement on the levels of gas production, which will keep more or less high levels of its spot price.
as one of variants of realization of the idea deals with the transformation of the cartel of the already existing body — the Forum of gas exporting countries (GECF). It brings together 12 leading gas producers, including Russia, Qatar, Iran, Venezuela, and 7 observer countries, including Norway and Kazakhstan. The organization was founded in 2001 in Tehran, and legally issued on 23 December 2008 in Moscow where energy Ministers of States parties adopted its Charter and signed an intergovernmental agreement. Initially, the forum was conceived as an analogue of OPEC, to be able to affect the price of “blue fuel”. But in the end she’s going once a year, functioning more as a consultative platform, and not as a cartel. It is expected that the new quality of the GECF will be empowered to determine the General for included countries policies in the sphere of production and sale of gas. I must say that such a scenario is doubly beneficial: after all, the Forum today is headed by the representative of the Russian Federation Yury Senturin.
the Reason for turning the GECF into a “gas OPEC” was the situation of the last months on the world market of “blue fuel”, which many experts estimate as catastrophic. Due to falling demand as a result of the pandemic, the warm winter in Europe and the overflow storage, the price of some gas hubs have reached the lowest figures in twenty-first century. In early July, the European gas storage facilities were filled to more than 80%. And it is likely that low prices will encourage traders to buy fuel, which will lead to an absolute load of tanks in August. Then a new collapse of spot gas prices is inevitable. For Russia this situation is very painful. For the first 5 months of 2020 the income of the main Russian dealer of “blue fuel” – Gazprom from deliveries abroad decreased by more than doubled by 53% and in the first quarter he did and for the first time in history received the loss is 306 billion.
What is the likelihood that the idea of Russianfir the heads of the energy sector will be realized? In the gas market has become more competitive due to the large-scale deliveries of liquefied natural gas (LNG) to Europe and Asia from the USA, Qatar and Australia, says the head of analytical Department AMarkets Artem Deev. In this regard, the share of pipeline gas (mainly from Russia), gradually reduced, and the price of LNG to fall to record levels compared to the previous year, they decreased three times. “The global gas industry has faced the same problems as oil: oversupply, increased competition, a drop in prices. Therefore, the market needs a regulator that will be able to prevent the price of chaos,” says our source.
With this view agree the leading expert of Institute of modern development Nikita Maslennikov. The main problem he sees is that the interests of the major producing countries often differ dramatically – not least because Russia relies on pipeline gas, and Qatar, USA, Australia – liquefied. And Qatar because of the large volumes and low cost production can dump in all of the markets are controlled. The idea of a “gas OPEC” he seems to be verbally supports, but when it comes to substantive discussion, it can “bury” in order not to lose its market share.
besides, surely Russia will face tough opposition with the Americans, says Maslennikov. After all, the US actively promoted in the Europe’s LNG, especially through Poland, where he built the corresponding terminals. In addition, they are thought to block the ambitious European project of Russia “Nord stream-2”. In such disputes, and any dialogue with them at the “gas OPEC” of the question, the expert believes.
see also: Coronavirus crisis: whether to treat the Russian economy
