On Monday, the Organisation of the Petroleum Exporting Countries (Opec) is expected to get a little brother when some of the world's largest gas exporters meet in Qatar to proclaim the founding of a natural gas "cartel". Gas importers are greatly alarmed, fearing exporters will exploit their "energy weapon" and bring the global gas market under the same spectre that has dominated oil for half a century - using cartel pressure to influence prices. Yet such anxiety misrepresents how the gas market functions and it mis-states what this exporters' organisation is likely to accomplish.

Natural gas markets differ significantly from oil markets. The gas trade is based mostly on long-term contracts between buyer and seller, whose price is usually indexed to oil and oil products. This market structure has two implications for cartelisation. Most countries produce gas that is already designated to a seller - hence they cannot easily keep the gas away from the market and storing it is expensive anyway. Second, in most markets, the price of gas reflects the scarcity of oil, not gas. If cartelisation requires withholding supply to increase prices, such a mechanism will be weak in gas markets, especially since there is no global gas market but only a collection of regional markets with their own prices.