A bid by natural gas-producing nations for an OPEC-style alliance could actually undermine prices for exporters. Why? Oversupply and easy alternativesTo anyone who recalls OPEC's rise to global economic importance in the 1970s, the prospect of a similar cartel among natural gas exporters has become a cause for concern. An oil embargo by the Organization of Petroleum Exporting Countries quickly led to price spikes, fuel shortages and hours-long gas lines for motorists. Inflation soared, stifling growth in the U.S. and Europe.
That's partially why a two-day meeting of 14 of the world's biggest gas exporters this week in Doha, Qatar, is putting a nervous edge into energy markets and raising alarm among gas-importing nations.
With all the press attention and discussion since Iran and Russia touched on the idea in February, it would seem another specter is haunting Europe—the specter of the formation of an OPEC-like organization for natural gas among countries like Iran, Algeria, Russia and Venezuela. The worry is that these countries, which together control 42% of the export market and 73% of global reserves, could establish a cartel and fix prices, holding Western nations at their mercy.
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