Russia and Iran are have begun talks to create an OPEC-like cartel for natural gas which would allow them to coordinate an “extraordinary” level of reserve output, giving them tremendous control over the tightness of the market and the price of the resource, according to a report by OIlPrice.

The report said, “Occupying the number one and number two positions in the world’s largest gas reserves table, respectively – Russia with just under 48 trillion cubic meters (tcm) and Iran with nearly 34 tcm – the two countries are in an ideal position to do this.”

Russia’s Gazprom and the National Iranian Oil Company (NIOC) signed a $40 billion memorandum of understanding, last month which was described in the report as, “a stepping stone to enabling Russia and Iran to implement their long-held plan to be the core participants in a global cartel for gas suppliers in the same mold as the Organization of the Petroleum Exporting Countries (OPEC) for oil suppliers.”

Hamid Hosseini, chairman of Iran’s Oil, Gas, and Petrochemical Products Exporters’ Union, said of the memorandum of understanding, “Now the Russians have come to the conclusion that the consumption of gas in the world will increase and the tendency towards consumption of LNG has increased and they alone are not able to meet the world’s demand, so there is no room left for gas competition [between Russia and Iran].”

According to the report, the Russia-Iran cartel sees LNG supplier Qatar, the supplier with the third-largest gas reserves in the world, just under 24 tcm, as a prime candidate for joining them, and giving the cartel even further control over gas production and the price of the product.

All three nations currently produce just under 60% of the world’s gas reserves. The three countries were vital to the formation of the Gas Exporting Countries Forum (GECF), the 11 members of which are responsible for over 71% of global gas reserves, 44% of its marketed production, 53% of its gas pipelines, and 57% of its LNG exports.