Russian Deputy Prime Minister Alexander Novak and Saudi Arabia’s Energy Minister today discussed the idea of creating an alliance of gas-producing countries, given the rise in the price of “blue gold”.
At an Energy forum in Moscow, Novak said he would regulate the gas market in the image of OPEC+ it was a “rational” idea, but added that it was necessary “to work on it more carefully”.
At the same forum, the Saudi minister Abdelaziz bin Salman he said that he had discussed this idea with Novak, who was once minister of energy in Russia and is an expert on OPEC+.
OPEC+ is an alliance between the Organization of Petroleum Exporting Countries (OPEC) and other oil-producing countries that are not part of this cartel, such as Russia, which aims to regulate the supply of oil and thus control its price.
“We discussed (…) and we concluded that it would be good to reflect on this issue.. We are going to study this”, said the Saudi minister.
Gas exporting countries already meet regularly at the Forum of Gas Exporting Countries (FPEG), an organization of which Riyadh is not a member – despite being an oil heavyweight, Saudi Arabia is only the ninth largest gas producer in the country. world, according to data from the US Energy Information Agency.
Unlike OPEC, the FPEG does not set production quotas for its members.
With gas prices varying widely from country to country and in a market dependent on long construction pipelines bringing together producers and importers for decades, a cartel that sought to control gas prices would find it more difficult to operate than in a global oil market.
The European gas price did not react appreciably to these observations: the reference market, the Dutch TTF (Title Transfer Facility), stood at 99.03 euros (an increase of around 5%) per megawatt hour (MWh ), after having reached the highest point on October 6, at 162.12 euros, and before Russian President Vladimir Putin gave assurances that his country would ensure European demand.
Even so, the price of gas has risen 600% in the last 12 months.