May 7, 2022
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America is quarreling with the Arabs over oil, and this will end badly for the US – gasoline will rise in price again

In the photo: view of the oil storage tank in the port of Fujairah.

In the photo: view of the oil storage tank in the port of Fujairah. (Photo: AP/TASS)

The US Senate Judiciary Committee approved the NOPEC (No Oil Producing and Exporting Cartels Act) bill, which will allow the government to sue antitrust lawsuits against oil-producing countries, including members of OPEC.

If this bill is passed, American courts will be able to consider claims against states that, in Washington’s opinion, are involved in cartel agreements. In fact, the American authorities want to single-handedly decide which actions of oil-producing countries in the market, aimed at limiting oil production and setting prices for it, are legal and which are not.

Now the document must be approved by the chambers of Congress, after which it must be signed by the president.

“It is a long-standing American approach that national jurisdiction should extend beyond the United States,” noted leading expert of the National Energy Security Fund, lecturer at the Financial University under the Government of the Russian Federation Stanislav Mitrakhovich. They have been using this approach for a long time.

– As for the story with NOPEC, the question is whether the administration will support the story Biden. They may be against, and then the Congress may still abstain.

“SP”: – Why did such a proposal arise at all?

— For several months, the Americans have been trying to put pressure on Saudi Arabia and the United Arab Emirates, the main participants in OPEC and OPEC +, so that they increase production beyond the level agreed within OPEC + (and an increase in production by about 0.43 million barrels per day was agreed monthly ), including to replace Russian supplies and hit Russia harder.

OPEC + does not want to do this, because the Emirates, Saudi Arabia have their own claims against the Americans and about the personal relationship between the Crown Prince of the SA and Biden, plus the Arabs are unhappy that the Americans want to implement the nuclear deal with Iran, in addition, the Arabs the impression is that Americans want to seize the financial assets of anyone they don’t like. They understand that after Russia, they may be next. Hence the intransigence on the part of the Arabs.

Now the Americans are trying to negotiate not in a good way, but in a bad way, that is, to scare the Arabs. They just want to start seizing their assets for being in a cartel. Only claims to Russia for Ukraine, and to the Arabs – for the fact that they form a cartel. The day after tomorrow there may be claims to China about the Uighurs, Taiwan, something else.

There is an intrigue: either the Arabs get scared and stand on the line, or they suddenly do not stand on the line, this will cause a total loss of confidence in the dollar. Yesterday they arrested the assets of Syria and Iran, today Russia, tomorrow Saudi Arabia, the day after tomorrow China and India, and then who will be left? Will the total trust in the dollar, which has been building up over decades, accidentally disappear after that?

Americans understand that it is possible to go too far. Realizing this risk, the Biden administration is not yet ready to support this act. But perhaps the time will come when they will be ready to do it. Perhaps this will become clear in the coming days, months.

“SP”: – Let’s say they accepted it, Biden signed it. What’s next – sanctions against all dissenting oil-producing countries?

– I think there may be measures that are applied against Russia, Iran. The assets of the Central Bank were seized from us, the assets of companies, the accounts of individuals were frozen, the yachts of the oligarchs were taken away. The main principle is to select. For example, shares in American refineries, freeze dollar accounts.

This has been going on for a long time. A couple of months ago, there was an interview with Crown Prince Salman to one of the foreign buildings, where he said that, firstly, he did not care what Biden thought about him, and secondly, Saudi Arabia could both increase and decrease investment in American dollar assets. That is, we are talking about the fact that maybe it’s time to sell assets in the West before they are frozen.

Of course, one cannot quickly sell the assets of oil refineries, but something can be done. Yachts, for example, to display.

This story, on the one hand, demonstrates the American influence, on the other hand, the fragility of this influence, because what else to think? Keep money in America?

Realizing that the stick may be overstretched, the Biden administration may be slow to support this law or slow to impose sanctions. They are still implemented by the executive branch, and Congress only creates a legal framework to do it.

“SP”: – But other countries can begin to take similar measures, including against the United States?

– The American press has already written that Saudi Arabia is establishing a dialogue with China on the subject of selling oil for yuan. These are the first steps in this direction. Not to mention the fact that so far there has not been a single conversation between Salman and Biden, and he regularly calls Putin on the phone. This is an indicator.

For example, in Qatar, people do not really understand what to expect from the Americans. Earned money cannot be frozen overnight? Isn’t it better to diversify assets, currencies? What should the Chinese think then? By the way, they recently conducted exercises on the readiness of the financial system for sanctions like those imposed against us, because at some stage they will do it against the Chinese.

The more Americans wave the financial saber backhand, the more they can scare everyone away from themselves.

International Lawyer, Associate Professor at RANEPA Kira Sazonova:

– Back in 2016, a very resonant bill called JASTA (Justice Against Sponsors of Terrorism Act) was adopted in America, for which it was very criticized Barack Obama. The document was associated with the ability to apply directly to American courts in order to seek justice on the subject of September 11, 2001. This greatly jeopardized the relationship between the United States and the Saudis, and even the prince of Saudi Arabia came and tried to sort things out.

Anything that ties international modes of interaction to national jurisdiction without at least some glimpse of international arbitration is generally bad. Whenever a lawsuit ends, naturally, most likely, not in favor of the state against which the lawsuit is filed, the question arises – what’s next? How will you hold this state, let’s say an OPEC member, accountable? There is only one answer – through sanctions.

Of course, we need to bring the story with the bill to the end. As far as I know, there have already been attempts to introduce a similar bill several times, in particular, last year. Unsuccessfully, but the global line is clear – this is a war on a planetary scale between shale gas producers and between classical oil-producing states in the format of OPEC and OPEC+. If we take the OPEC format, then this is 2/3 of all proven oil reserves and almost 40% of world oil exports.

Shale gas, which has a lot of side effects, contraindications, difficulties in production and transportation, will fight for its place under the sun, so America will now promote this topic in every possible way. This bill is one such story.

“SP”: – That is, this document also applies to gas?

— Yes, over time it will be related topics. Shale gas, shale oil as an alternative way to extract energy resources through hydraulic fracturing.

“SP”: – Now the US has difficult relations with many OPEC countries. What kind of reaction should be expected from the oil-producing countries, will they obey?

– The reaction, of course, will be negative. It will be said that they refuse to accept the jurisdiction of American courts. What else to expect in such a situation? We understand that in such a scenario, this can be extrapolated to any country. Each state will independently judge everyone, all countries will adopt some kind of judicial decisions, then try to implement sanctions.

This is a parallel reality with the established system of classical international law. Few people will like this, because few people can afford the sanctions pressure of such a force as, for example, the American one. There will be very strong resistance.

“SP”: – And OPEC?

– In any format (and OPEC – 13 classical countries), and OPEC + is a motley company, the problem of which, it seems to me, is that there is no single soldering substance. They have nothing in common, except for the price of oil and oil production. These states are very divided, this is their problem. This makes it difficult to act as a united front against shale oil producers. Perhaps a common misfortune that may come from the United States will bring them closer.

“SP”: – Such actions of the United States will not lead to a big war? After all, they are actually trying to subjugate a huge part of the world.

– They are trying to oppose, but at the same time give some kind of alternative – more expensive, beneficial to themselves. On a global scale, this is a redistribution of the energy market, which is now super relevant. I do not think that the approval of the bill by the Legal Committee is a serious threat to international relations. Rather, an outline of a general trend.

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