A 'Gaspec' to mirror Opec has long been talked about, and now we have the "Gas Troika" of Russia, Qatar and Iran. Where's it headed?
In case there might be any doubt, Gazprom's Chairman Alexei Miller has helpfully given a steer:
"the era of cheap hydrocarbons has come to an end, and the parties will proceed from this standpoint in their work"
Thanks, Alexei: and didn't you also tell us in June that oil would hit $ 250 per barrel ? And, remind us, most of your hard-currency gas sales are indexed to oil, yes ? Oh, and the price of Gazprom shares recently ..? Well exactly.
Neither Qatar or Iran will have any undue expectations about getting Russia to observe any production quotas they might propose: not Mr Putin's style at all. No; and he's pretty miffed at being frozen out from the post-Georgia Top Table as G8 deliberations have reverted to G7: no-one seems to want his views on the economic crisis. No coincidence, we suggest, that he's also calling the Troika the 'Gas G3'. Gee-up, there !
But there is a serious point to all this. For a good few years to come, much of Europe is hooked on Russian gas. Collapsing oil-linked gas prices and eroding Gazprom credit-standings will do nothing to help finance the huge capital expenditures needed to keep this show on the road. Germany in particular can expect to be invited to bridge this growing funding gap: by direct investments, loans and perhaps renegotiating gas prices. Italy may get a similar approach.
The Troika may be mostly a vehicle for cutting a dash in the snow. But Russia's need for sustaining high energy prices in the coming downturn is more than a parochial concern, and we may all need to think of new ways through the wintry weather ahead. Christmas candles, anyone ?