With global gas supplies growing faster than demand and forecasters warning of a deepening glut, it was only a matter of time before analysts began talking about a gas version of OPEC with the power to control international prices. But is an OGEC even possible?
There is already an organization of gas exporters. It’s called the Gas Exporting Countries Forum and involves a dozen countries, led by Russia, Qatar, and Iran. The list of members also includes Nigeria—Africa’s top LNG producer—Egypt, which has recently staked a claim in the international gas market with a number of discoveries, and Libya.
But then that be what finally redraw borders to stable ones that reflect the populations political nature.
Opec+ would have cut radical amount and comply. Major producers would have to sllow market share for production recovery in damaged members. Even then there's a lot of other production that could developed or brought back into service.
But the real factor is waiting in the wings, electrification. Attention is paid to light vehicles, but larger demand destruction available in island generation, busses, fixed route utility trucks, all but long haul trucking. India has announced financing for electrification of train and on and on.
A lot of producers are currently ramping small production facilities. Oil hits $70 and the financial sector will open the taps to floods of money.
Then there's the time value. Every year reserves in the ground stand a higher chance of falling off the financial viability. Demand destruction promises a rationalization favoring the lowest cost oil.