May 8, 2022
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NOPEC will provoke an oil apocalypse in the world

On May 5, the US Senate Judiciary Committee approved the bill. NOPEC (Law to Prohibit Oil Extraction and Export Cartels), or Act against Cartels of Oil Producers and Exporters.

In fact, the bill is directed against one cartel – OPEC (Organization of the Petroleum Exporting Countries, OPEC). OPEC is an international intergovernmental organization created by oil-producing countries to control oil production quotas. It was founded at a conference in Baghdad on September 10-14, 1960 at the initiative of five oil-producing countries: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.

Currently, OPEC includes 13 countries: Algeria, Angola, Venezuela, Gabon, Iraq, Iran, Congo, Kuwait, Libya, United Arab Emirates, Nigeria, Saudi Arabia, Equatorial Guinea. OPEC member countries control about 2/3 of the world’s oil reserves (approximately 1.200 billion barrels). They account for about 35% of world production and almost half of world oil exports.

In November 2016, an expanded format of the agreement, called OPEC +, appeared when the Russian Federation entered into an agreement with OPEC on coordinating actions in the field of regulating the production and export of black gold. In addition to Russia, nine countries participate in OPEC + – Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Sudan, South Sudan. OPEC+ accounts for about 55% of global black gold production. The organization’s sixty years of experience shows that it really has the ability to manage prices on the world oil market through agreements on quotas for its production and export.

Of the leading oil producers outside OPEC+ are the United States; their share in world oil production was in 2020, according to estimates British Petroleumabout 17%. Also Canada (6.1%), China (4.7%) and Brazil (3.8%). The key figures in OPEC+ are the Russian Federation (12.6% share in world production) and Saudi Arabia (12.5%).

The NOPEC bill targets OPEC+, a group of 23 nations led by Saudi Arabia and Russia. One of the initiators of the project, senator Amy Klobuchar (Amy Klobuchar), said that Russian companies could also be among the goals of the act, “if they engage in anti-competitive cartel activity”.

Although the United States is currently the top country in terms of oil production, the vast majority of oil produced in the United States is for domestic consumption. A small part of the production goes to the external market. In the ranking of countries in terms of oil exports, the United States occupies only the eighth line. In addition, the United States simultaneously with the export of oil is engaged in its import (some grades for American refineries). The US, of course, is interested in keeping oil prices at a definitely high level, but they do not need exorbitant prices for black gold. This raises costs in the US economy, which consumes huge amounts of oil.

For several months, Washington has been negotiating with Saudi Arabia and the UAE so that they and their partners in OPEC and OPEC + increase oil production and curb the rise in prices for black gold. Negotiations did not bring success to Washington. Nigerian Secretary General of OPEC Mohammed Barkindo (Mohammed Barkindo) has repeatedly stated that the cartel will not be able to reimburse exports from Russia of more than 7 million barrels per day due to a lack of free capacity.

Saudi Arabia and its partners are very satisfied with the current prices. And it’s not just a matter of commercial interest. Riyadh no longer wants to dance to the tune of Washington. Relations between Riyadh and Washington are tense today.

Paradoxically, it was the United States that provoked the rise in energy prices with its sanctions against the Russian Federation. Oil prices today reached a level exceeding $100 per barrel. The sixth EU sanctions package is called the oil package. It provides for the refusal of EU member states from Russian oil as soon as possible (before the end of the year). If oil sanctions against Russia work, oil prices could soar to $150 or even $200 a barrel. At the same time, the sixth package of sanctions against Russia was initiated by Washington.

This wrecking activity of Washington threatens that first in Europe, and then throughout the world, a global energy crisis will break out. We remember that almost half a century ago (in 1973) there was already an energy crisis associated with a fourfold increase in the price of black gold. However, it did not affect the USSR and other socialist countries. And now the energy crisis can engulf the whole world and provoke a global economic crisis. The main culprit for this will be America, maniacally fanning the fire of the sanctions war against Russia.

The essence of NOPEC is to give the US Department of Justice the authority to file lawsuits against OPEC members for violations of antitrust laws. Violations must be determined based on criteria such as compliance or non-compliance with US antitrust laws. The first of these is the Sherman antitrust law (Sherman’s law) in 1890. Then, thanks to this law, it was possible to achieve the disaggregation of the oil trust John Rockefeller Standard oil. The disaggregation was carried out, but a number of new companies still remained under the control of Rockefeller, having concluded a cartel agreement among themselves. Then anti-cartel laws began to be adopted. A radical victory over the monopolies in the United States was not achieved. And since the days of President Reagan, antitrust laws have been forgotten in the United States. And so they remembered. But not in order to fight monopolization in the American economy, but in order to fight OPEC+.

There have been many attempts in the US Congress (16 in total) to introduce different versions of NOPEC for discussion. It seems that the first was undertaken in 2000, the last in the past. However, the progress of the document was usually blocked at an early stage. Congressmen were prudent, realizing that the passage of such a law could lead to complete chaos in international relations and create a boomerang effect for America. True, once in 2007, under US President George W. Bush, one of the versions of the bill was passed through the Senate and the House of Representatives, but they did not send it to the president for signature, since he promised to veto it. Today, observers note much greater support for the NOPEC bill in the US Congress. The likelihood that NOPEC will become law is quite high. “Prospects for passing look better than in the last 15 years”, – leads the agency Bloomberg word Kevin Book (Kevin Book), head of the company ClearView Energy Partners.

NOPEC has all the hallmarks of a legislative act with extraterritorial effect. The mechanism for the enforcement of judicial antimonopoly decisions against other states is not spelled out in the document. Most likely, the American court will simply announce the fact of violation by one or another country, which is part of OPEC +, of the American antitrust law. And then the procedures for imposing sanctions, which are now being worked out in Russia, will be included. The number of targets can grow to 23 (the number of countries that are members of OPEC +). Surely, direct sanctions under NOPEC will be supplemented by secondary sanctions against countries that will continue to cooperate with OPEC+ countries. And such cooperation will also include the receipt of oil from a country that is part of OPEC +. Meanwhile, almost all countries of the world buy oil from OPEC+ countries today.

NOPEC can become the detonator of a large, even global, sanctions war. And even then the price of one barrel of oil will reach not 100 or even 200 dollars, but 500 or 1000 dollars. NOPEC is a time bomb, after the explosion of which the oil apocalypse will come in the world.


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