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Is Gas Cartel's Profitable for Russia? (A Case of European Gas Market)

Author

Listed:
  • Sergey Chernavsky

    (Central Economics and Mathematics Institute, RAS, Moscow, Russia)

  • Oleg Eismont

    (System Analysis Institute, RAS, New Economic School, Moscow, Russia)

Abstract

The problem of gas cartel formation is widely discussed in many countries, including Russia. Gas cartel can exist only within the world natural gas market, the latter being possible provided liquefied natural gas (LNG) becomes wide spread. Since for Russia, European gas market is of prime importance the paper analyses perspectives of gas cartel, relative to the European market. Equilibrium states of such a market have been found for the two cases - that of a competitive behavior of LNG exporters to Europe, and of gas cartel which includes Russia and LNG exporters. Conditions ensuring that Russia gets higher profit in case of participating in a gas cartel, rather than in case of competitive behavior of LNG exporters, have been obtained.

Suggested Citation

  • Sergey Chernavsky & Oleg Eismont, 2009. "Is Gas Cartel's Profitable for Russia? (A Case of European Gas Market)," Journal of the New Economic Association, New Economic Association, issue 1-2, pages 127-149.
    • Handle: RePEc:nea:journl:y:2009:i:1-2:p:127-149
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    References listed on IDEAS

    as
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    Keywords

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    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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