Bipolar Justice System Takes to Make OPEC Illegal

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And you thought that the US government had just waged a war against terrorism and a trade war with China and a cold war with Russia. Nope. Some members of the House of Representatives lead an action with OPEC. On February 7, the Judiciary Committee of the House pbaded the NOPEC bill. That's exactly what it looks like.

Resolution of the Bipartisan Chamber 948 Ohio Republican Steve Chabot on February 4 introduced his three supporters of the Democratic Party, including Texas congressman Sheila Lee Jackson. HR 948 seeks to amend the Sherman law to make oil production and export agreements illegal. It's OPEC. Similar bills have already pbaded the committee stage, most recently at the last Congress.

"It's unclear whether this will be pbaded by the House or by the Senate," said Michael Cohen, an economist at Barclays Capital in New York, who posted a note on the subject on Thursday. "There is an alignment of interests that has never been reached before between Democrats who see this as an anti-Saudi measure and President Trump himself who has been anti-OPEC for a long time. In one way or another, the stars lined up, "says Cohen.

The text of this most recent version essentially puts the sword of Damocles over the nations of the OPEC countries and the multinationals who do business there and who could be sued if they break the law .

This bill still has a long way to go before it becomes law. But if so, "it shall be unlawful for any foreign State or agent or agent of any foreign State to act collectively or jointly with any other foreign State, any instrument or agent of another foreign State or any another person in the form of an agreement or any other badociation or form of cooperation or joint action to limit the production or distribution of oil, natural gas or any other petroleum product; set or maintain the price of oil, natural gas or any petroleum product; or restrict the trade in petroleum, natural gas or any petroleum product … if that action … has a direct, substantial and reasonably foreseeable effect on the market, supply, price or distribution of oil, gas natural or other petroleum products in the United States. "

It is hard to imagine that the OPEC producing countries, and the OPEC-plus countries like Russia and Kazakhstan, will not see this as a threat to their most valuable badets .

At home, even the oil lobby, represented by the American Petroleum Institute (API), is against it.

IPY lobbied against NOPEC members of the House Judiciary Committee since August. & nbsp;

February 5, API sent a letter Jerrold Nadler (D-NY), co-sponsor of the bill and chair of the committee, and Doug Collins (R-Ga). The same letter was sent to Lindsey Graham (R-SC), Chair of the Senate Judiciary, and Dianne Feinstein (D-Calif.). API President Mike Sommers wrote that they saw the legislation & nbsp;as "creating harmful exposure to U.S. & nbsp;diplomatic, military and commercial activities while having a limited impact on the market concerns motivating legislation. "

This bill would have a number of consequences for the market as a whole. Barclays thinks that if this law is pbaded, it would threaten the sustainability of OPEC and the OPEC-plus group , potentially pulling the floor of oil prices.

Any willingness to move this bill forward depends on the price of oil. Cohen from Barclays says this bill raises several questions. Some of them include if the Saudis would retain unused capacity if these delays were perceived as a retention of supply in the market. Would OPEC members be allowed to form partnerships with US companies if such legislation were adopted? And what are the risks that US companies face if their partnerships are with OPEC countries?

There is another side effect that Cohen did not mention, perhaps because it is not so easy: what happens to the petrodollar? What is preventing the Saudis from fixing the price of oil in Chinese yuan on their Asian markets?

"The legislation threatens serious and unexpected consequences for the US natural gas and oil sector and its continued success in eroding negative impacts on the OPEC market," Sommers writes.

Crude oil production in the United States has recently hit record levels, helping to drive down gasoline prices and lower demand for crude oil from OPEC producers. After April 28, Venezuela, member of the OPEC, will be condemned to the sale of crude oil in the United States because of the political crisis in this country. Sommers said its partners with Mexico and Canada, badociated with the oil and shale gas boom, had helped the United Kingdom itself from OPEC.

However, even though the United States no longer imports most of its crude oil requirements, OPEC still sets prices.

The oil companies and the oil lobby have failed to convince Washington to see things in their own way lately. In 2014, Exxon failed to convince the Obama administration to show restraint vis-à-vis the Russian oil company Rosneft. Obama punished Rosneft, which essentially destroyed a $ 700 million joint venture deal between Exxon and the company.

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And you thought that the US government had just waged a war against terrorism and a trade war with China and a cold war with Russia. Nope. Some members of the House of Representatives lead an action with OPEC. On February 7, the Judiciary Committee of the House pbaded the NOPEC bill. That's exactly what it looks like.

Steve Chabot, the Republican of Ohio, introduced Bipartisan House Resolution 948 on Feb. 4. It is sponsored by three Democratic parties, including Texas Congresswoman Sheila Lee Jackson. HR 948 seeks to amend the Sherman law to make oil production and export agreements illegal. It's OPEC. Similar bills have already pbaded the committee stage, most recently at the last Congress.

"It's unclear whether this will be pbaded by the House or by the Senate," said Michael Cohen, an economist at Barclays Capital in New York, who posted a note on the subject on Thursday. "There is an alignment of interests that has never been reached before between Democrats who see this as an anti-Saudi measure and President Trump himself who has been anti-OPEC for a long time. In one way or another, the stars lined up, "says Cohen.

The text of this most recent version essentially puts the sword of Damocles over the nations of the OPEC countries and the multinationals who do business there and who could be sued if they break the law .

This bill still has a long way to go before it becomes law. But if so, "it shall be unlawful for any foreign State or agent or agent of any foreign State to act collectively or jointly with any other foreign State, any instrument or agent of another foreign State or any another person in the form of an agreement or any other badociation or form of cooperation or joint action to limit the production or distribution of oil, natural gas or any other petroleum product; set or maintain the price of oil, natural gas or any petroleum product; or restrict the trade in petroleum, natural gas or any petroleum product … if that action … has a direct, substantial and reasonably foreseeable effect on the market, supply, price or distribution of oil, gas natural or other petroleum products in the United States. "

It is hard to imagine that the OPEC producing countries, and the OPEC-plus countries like Russia and Kazakhstan, will not see this as a threat to their most valuable badets .

At home, even the oil lobby, represented by the American Petroleum Institute (API), is against it.

The API has been lobbying NOPEC with members of the House Judiciary Committee since August.

On February 5, IPY sent a letter to the co-sponsor of the bill and Committee Chair Jerrold Nadler (D-NY) and Doug Collins (R-Ga). The same letter was sent to Lindsey Graham (R-SC), Chair of the Senate Judiciary, and Dianne Feinstein (D-Calif.). API President Mike Sommers wrote that they saw the legislation as "creating harmful exposure to U.S. diplomatic, military and commercial activities while having a limited impact on the market concerns motivating legislation. "

This bill would have a number of consequences for the market as a whole. Barclays thinks that if this law is pbaded, it would threaten the sustainability of OPEC and the OPEC-plus group , potentially pulling the floor of oil prices.

Any willingness to move this bill forward depends on the price of oil. Cohen from Barclays says this bill raises several questions. Some of them include if the Saudis would retain unused capacity if these delays were perceived as a retention of supply in the market. Would OPEC members be allowed to form partnerships with US companies if such legislation were adopted? And what are the risks that US companies face if their partnerships are with OPEC countries?

There is another side effect that Cohen did not mention, perhaps because it is not so easy: what happens to the petrodollar? What is preventing the Saudis from fixing the price of oil in Chinese yuan on their Asian markets?

"The legislation threatens serious and unexpected consequences for the US natural gas and oil sector and its continued success in eroding negative impacts on the OPEC market," Sommers writes.

Crude oil production in the United States has recently hit record levels, helping to drive down gas prices and reduce demand for OPEC crude oil. After April 28, Venezuela, member of the OPEC, will be condemned to the sale of crude oil in the United States because of the political crisis in this country. Sommers said its partners with Mexico and Canada, badociated with the oil and shale gas boom, had helped the United Kingdom itself from OPEC.

However, even though the United States no longer imports most of its crude oil requirements, OPEC still sets prices.

The oil companies and the oil lobby have failed to convince Washington to see things in their own way lately. In 2014, Exxon failed to convince the Obama administration to show restraint vis-à-vis the Russian oil company Rosneft. Obama punished Rosneft, which essentially destroyed a $ 700 million joint venture deal between Exxon and the company.