Daily Management Review

Saudi Arabia is trying to block NOPEC


09/14/2018


Saudi Arabia called a well-known US right defender to prevent a bill that has been submitted to Congress. The bill allows suing oil producing countries in US courts for possible manipulation of prices in the market.



According to the published lobbying list, Riyadh signed a $ 250,000 contract with Ted Olson, who is also known for his victory in the process of recounting votes in Florida after the 2000 presidential election.

Olson and associates from Gibson, Dunn & Crutcher company is going to provide legal advice, according to the registry, and will try to convince lawmakers to block the initiative that will expose members of the OPEC to American antitrust laws. Olson may receive an additional $ 100,000 every month if Riyadh extends the agreement topersonal meetings with congressmen.

The possibility of involving Saudi citizens in criminal and civil liability for deals with oil could affect cooperation with the US, Riyadh fears. If officials send the bill for signature to the US president, it can put Donald Trump in a difficult position, as the latter, along with Saudi Arabia, is trying to resist the influence of Iran in the region and to revive the work of the Council on Cooperation of the Persian Gulf states, which was on the verge of collapse after the Saudis declared a blockade against Qatar, Al Monitor reports.

The draft law against cartels in the oil market under the working title "No Oil Producing and Exporting Cartels Act" (NOPEC) is supported in both chambers of the congress. Chairman of the legal committee of the House of Representatives Republican Bob Goodlatte called the document "long overdue," and a high-ranking Democrat Jerry Nadler believes that the law will "effectively punish" all violators.

"The possibility of public trials in American courts, as well as the possible seizure of individual and state funds, is an extremely powerful lever of pressure in the hands of Americans," says Karen Young, a Middle Eastern expert at the American Enterprise Institute. "However, the threat of using this law against security partners such as Saudi Arabia, can affect not only the energy, but also different areas of international cooperation."

According to Congressman Goodlatt, the bill will extend the US antitrust law to OPEC, removing the immunity from foreign countries. The shield created by a legal precedent in 1979, when the California District Court ruled that trade unions cannot file a lawsuit against OPEC pricing methods.

Saudi Arabia has already had problems with judicial proceedings in US courts. Two years ago, the country poured enormous money unsuccessfully fighting against the law enabling victims families to file lawsuits against Saudi Arabia for its role in the terrorist attacks on New York and Washington on September 11, 2001.

According to the US Energy Information Administration, OPEC accounts for 60% of world oil trade. The slightest signals from Riyadh about new production figures, for example, may have a serious impact on the formation of oil prices.

Supporters of NOPEC believe that this will give the American side power to force the cartel member countries to push up production of oil amid the imposed US sanctions against Iran's oil sector.

"Judging from past experience, the Saudis tend to increase production of oil when someone's production falls sharply," said analyst Ariel Cohen. 

The Republicans don't have much time to advance the bill: sanctions against Iran will enter into force in November, and then mid-term elections will take place, at which the Democrats may gain control over both chambers of the congress.

source: cnbc.com






Science & Technology

China is developing technology to capture greenhouse gases

IEA: The growth of renewable energy is slowing

Google introduces new smartphone and beta Android Q

SpaceX’s Dragon Crew Capsule Test Met With Anomaly

New Security Study Finds Millions Use 123456 As Password For Email Accounts

The Devastating Panama Disease Could Spell Extinction For Bananas

Walmart to hire 4 thousand robot cleaners

Samsung Galaxy Fold: Expensive but fragile

USA and South Korea launch the first commercial 5G networks

Deliveries of AR/VR devices to grow by 54% in 2019

World Politics

World & Politics

The Earth Is ‘Not On Track’ To Tackle Global Warming: The U.N. Secretary General

Is Finland’s aging population turning the country into Japan?

The United States will impose new duties on Chinese goods on Friday

Jyrki Katainen: EU is not a milk cow

Oil lobby and the planet's future

Trump files a lawsuit against Deutsche Bank and Capital One

Trump Urged Abe To Influence Japanese Auto Firm To Produce More Vehicles In The U.S.

IEA: Iraq will enter the top three oil leaders