A Gas Cartel in the Global Market? Hype or Reality

Authors

  • Fazel M. Farimani Post Doc Researcher at Sharif University of Technology, Sharif Policy Research Institute, SPRI, Tehran, Iran http://orcid.org/0000-0002-5695-0190
  • Seyed Reza Mirnezami Assistant Professor, Sharif University of Technology, Sharif Policy Research Institute, SPRI, Tehran, Iran
  • Ali Maleki Assistant Professor, Sharif University of Technology, Sharif Policy Research Institute, SPRI, Tehran, Iran

Abstract

In late 2018, Qatar -as a key player in the global gas market- announced that it has decided to quit the OPEC and rather will be focussing on its gas industry. Such a decision, drew the attentions once again and after a decade to the issue of gas cartel formation.  The basic question of this paper is under which conditions gas cartel formation is feasible in presence of an oil cartel. Using a game theory framework the paper models the interaction of countries that export both gas and oil and are member of OPEC with those that export only gas or oil. Results indicate that gas cartel formation is feasible but under very vulnerable conditions. It is also shown that active members of OPEC who are also key players in the gas market prefer to form the cartel, however, it may not be the case for countries with unbalanced portfolio of oil and gas export. The impact of gas cartel formation on the price and supply of both oil and gas is also discussed.Keywords: Gas Market, Gas Cartel, Bargaining, Game TheoryJEL Classifications: C78, D43, L13, Q41DOI: https://doi.org/10.32479/ijeep.8128

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Author Biographies

Fazel M. Farimani, Post Doc Researcher at Sharif University of Technology, Sharif Policy Research Institute, SPRI, Tehran, Iran

Fazel accomplished his studies in Masters and Phd levels in Economics at the University of Dundee, UK (Center for Energy, Petroleum and Mineral Law and policy) and University of Windsor, Canada.

Seyed Reza Mirnezami, Assistant Professor, Sharif University of Technology, Sharif Policy Research Institute, SPRI, Tehran, Iran

Dr Mirnezami obtained his MSc from Edinburgh Universoty and his PhD from HEC, Polytechnique Montreal, Montreal, Canada

Ali Maleki, Assistant Professor, Sharif University of Technology, Sharif Policy Research Institute, SPRI, Tehran, Iran

Ali obtained his PhD from the University of Edinburgh and his main area of expertise is energy policy.

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Published

2019-10-04

How to Cite

Farimani, F. M., Mirnezami, S. R., & Maleki, A. (2019). A Gas Cartel in the Global Market? Hype or Reality. International Journal of Energy Economics and Policy, 9(6), 296–304. Retrieved from https://econjournals.com.tr/index.php/ijeep/article/view/8128

Issue

Vol. 9 No. 6 (2019)

Section

Articles

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