Putin: No natural gas cartel in the works

The Associated Press

President Vladimir Putin said Feb. 1 that Russia had no existing plan to build a global cartel of natural gas producers like the OPEC oil group and rejected suggestions that the Kremlin is using its vast energy reserves as a political weapon.

Iranian officials had raised the idea when Igor Ivanov, the secretary of Russia’s presidential security council, visited Tehran in late January.

“The idea of a gas OPEC is interesting, we will think about it,” Putin said during his annual news conference in the Kremlin. He added, however, that Russia has no immediate plans to build such a group.

“We aren’t going to create a cartel, but coordinating our activities would be a right thing to do,” Putin said, responding to a question on whether he would discuss the idea during his trip to the Persian Gulf set for March.

Putin said such coordination should help ensure stable supplies.

Russian oil shipments to Western Europe were interrupted for several days in January amid a dispute over prices with Belarus, through which a main Russian pipeline passes. In early 2006, gas shipments to Europe were reduced amid a similar dispute with Ukraine.

“The thesis is being thrust on us all the time that Russia is using its old and new economic efforts to attain foreign political goals. It is not so,” Putin said.

Many observers had speculated there was a political context to both disputes. The price hike for Ukraine came amid apparent Kremlin discomfort over Ukrainian President Viktor Yushchenko’s West-oriented policies. Belarus, led by authoritarian President Alexander Lukashenko, has become an increasingly awkward ally for Russia.

Putin repeated Russia’s contention that the price increases are driven simply by Russia’s desire to get fair prices for its gas and oil after years of providing energy at below-market prices to ex-Soviet neighbors.

“We’re not obliged to subsidize the economies of other countries,” Putin said. “Nobody does that, so why are they demanding it of us?”