The Next OPEC

The title of this post actually has nothing to do with OPEC. Maybe I should have entitled it "The Next Cartel," because that's exactly what's on its way. This cartel has nothing to do with crude. We are talking about natural gas here.

Although the countries that will be involved aren't finalized yet, some of the mentioned ones included: Russia, Iran, Qatar, Venezuela and Argentina. Although the actual impact of such a cartel is impossible to tell, we could see pump and heating prices go through the roof.

The date for the cartel to commence is set for April 9. I believe it is also important to note that like OPEC, the majority members of this cartel will be enemies of the United States. It is just another example how the allocation of energy commodities is potentially the ultimate weakness for the U.S.

Believe me when I say that anything Russia can do to hinder the U.S. and strengthen its stance against the West, it will do. To throw a few statistics as you, Russia has the largest natural gas reserves in the world at 48 trillion cubic meters. That is 27% of the world reserves. This cartel would hold 73% of the world reserves and 41% of the world production of natural gas.

It is important to note that natural gas contracts are generally long term. When this cartel organizes, it probably won't be able to have a huge initial market effect, but it will eventually wiggle its way into a stance with a much stronger market influence.