World Energy Outlook 2006

second-largest consumer of gas – gas is sold under regulated, subsidised
prices, with no explicit oil-price indexation. Non-OECD gas exports, when
commercial, are most often priced against oil. We estimate that the share of
global gas supply that is traded in bulk under contracts with explicit oilprice
indexation clauses is probably at least one-third and may be as high as
half. Focusing solely on cross-border trade, contracts with oil-price
indexation probably account for around 90% of the world total.
place a ceiling on how high gas prices can go in absolute terms – have
insulated gas prices from part of the recent increase in oil prices, especially
since 2003 (Figure 11.3). In Japan, for example, the price of imported LNG
at the end of 2002 was the same as that of crude oil in calorific value terms;
by the end of 2005, gas cost more than 40% less.
dollars per MBtu
Figure 11.3: Average IEA Crude Oil and Natural Gas Import Prices
14
12
10
8
6
4
2
0
92 93 94 95 96 97 98 99 00 01 02 03 04 05
Oil Gas (United States)
Gas (European Union) LNG (Japan)
Wholesale coal prices have generally increased much less than the prices of oil
and gas since 2002. The average price paid by OECD countries for imports of
steam and coking coal rose steadily in 2000 and 2001, but then fell back. By
the beginning of 2003, coal prices were well below the level of the 1990s. Coal
274 World Energy Outlook 2006 - FOCUS ON KEY TOPICS
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