Letter from London: ‘Gas OPEC’ may be just a matter of time

A true gas OPEC – if it ever comes into being – will be a very different beast from the oil OPEC we have today. Crude oil is a liquid, internationalized market. If a Saudi prince gifted you a tanker full of crude today, you would be able to figure out very fast what the cargo would be worth to a buyer and sell the cargo while it’s on the water. That’s a lot harder with LNG as there is no internationally liquid market to speak of and also there is a lot of long-term gas bound in legacy agreements with price formulas. And the two true gas markets, Europe and North America have their dynamics that won’t take any cues from any meeting of wannabe market riggers. 

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