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. Last Updated: 07/27/2016

Iran Backs Gas Cartel Idea

TEHRAN, Iran -- Iran and Russia could start up a gas exporting group like OPEC based on their command of the world's largest natural gas reserves, Iranian Supreme Leader Ayatollah Ali Khamenei was quoted as saying Monday.

Forming a grouping of producers to control gas prices has been mooted in the past but officials in producer countries, including Russia, have tended to play down its prospects, partly because the gas market is dominated by long-term contracts.

"Iran and Russia can establish the structure for an organization of gas cooperation like OPEC as half of the world's gas reserves are in Russia and Iran," Khamenei was quoted by state television as saying.

He was commenting during talks on Sunday in Tehran with Security Council Secretary Igor Ivanov.

Russia and Iran are the world's No. 1 and No. 2 holders of gas reserves respectively. Iran's reserves are estimated at 27 trillion cubic meters or more and Russia's is estimated to hold 48 trillion to 67 trillion cubic meters. World reserves are estimated by industry experts at 173 trillion to 198 trillion cubic meters.

The European Union expressed concern last week that Russia and Algeria, another major supplier of gas to the EU, might create a gas cartel that could hurt EU consumers.