Pushing support: Iran backs cartel for monitoring international gas trade
Iran encourages gas cartel
Iran has stated that it believes an Opec-style cartel for natural gas producers could help cut production and costs and benefit customers.
"Iran supports setting up a body that would guarantee the rights of both consumers and producers," vice minister at the Oil Ministry Ali Kordan, told the Iranian daily Ettelaat, according to Reuters.
"Trading in gas has grown so much internationally that a policy-setting body is needed. Setting up such a body would cut production costs and this would help protect the rights of consumers," added Kordan.
The United States and the European Union have said creating a body for gas, resembling Opec would endanger global energy security and make room for price manipulation.
Fatih Birol, chief economist of the International Energy Agency, said that a cartel of gas producers was undesirable because it would cause high price concerns for utilities.
Russia and Iran, along with other gas producers such as Qatar, Venezuela, Nigeria and Algeria, already meet as part of an informal club.
In recent years, their meetings have spurred speculation that the club might be formed into a body for gas, resembling Opec.
Experts have said the gas forum is unlikely to become as influential as Opec because gas deals are done on a long-term basis, rather than the spot system by which oil is traded.
Some gas contracts run for over 25 years and include formulas for smoothing out spikes in energy prices.