While Australian pollies are busy flexing over Vladimir Putin, a more subtle reading of events might throw up a different stance. Russia is the driving force behind the Gas Exporting Countries Forum (GECF), the gas OPEC if you will, which is growing firmly:
Since the establishment of the GECF in 2001 there has always been speculation that some of the world’s largest producers of natural gas, in particular Russia and Iran, intend to create a gas cartel equivalent to OPEC which would set quotas and prices. The idea of a gas OPEC was first floated by then Russian President Vladimir Putin and backed by Kazakh President Nursultan Nazarbaev in 2002. In May 2006 Gazprom deputy chairman Alexander Medvedev threatened that Russia would create “an alliance of gas suppliers that will be more influential than OPEC” if Russia did not get its way in energy negotiations with Europe.[25] Iranian officials have explicitly expressed strong support for a gas cartel and held official talks with Russia.[26][26] Cartel speculation was again raised when the ministers met on 9 April 2007.[27][28] The 6th Ministerial Meeting of the GECF established an expert group, chaired by Russia, to study how to strengthen the GECF. According to the Algerian Energy and Mines Minister Chakib Khelil, this mean that in the long term the GECF will move toward becoming a gas OPEC.[28] On 11 December 2009, Russia’s Energy Minister Sergey Shmatko stated: “Today we can speak about gas OPEC as a fully fledged international organization. By a unanimous decision a Russian national was elected its secretary general. This is to show that member countries expect Russia to use its political weight to promote it.”
This is the type of organisation that would have prevented the current iron ore meltdown. Admittedly, it doesn’t really fit with Australian traditions of free trade but then we’ve never been an energy super power before either. There are good reasons to think that joining would be in our economic interest. The main reason is that LNG buyers are banding together to trash prices. Japan and India are in advanced discussions to jointly procure gas, others might join them, and even at the individual level buyer consolidation is growing. From Bloomie:
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