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OPEC has urged all its members not to mention specific oil prices, to instead stick to the ‘market stability’ narrative in public comments about oil policies to avoid the risk of potential U.S. antitrust lawsuits for manipulating the market if the United States passes a proposed legislation, Reuters reported on Wednesday, citing sources close to OPEC.
The proposed U.S. legislation—the so-called No Oil Producing and Exporting Cartels (NOPEC) Act—could pave the way to antitrust lawsuits in the U.S. against the cartel and its national oil companies, if passed.
Forms of antitrust legislation aimed at OPEC were discussed at various times under Presidents George W. Bush and Barack Obama, but they both threatened to veto such legislation.
In May this year, the NOPEC Act was introduced again. Such legislation would make OPEC subject to antitrust law by removing a state immunity shield created by judicial precedent.
Given President Trump’s continued criticism of OPEC and the way the cartel manipulates the oil market and prices, OPEC members are concerned that the legislation may pass this time around.
Last month, Saudi Arabia—OPEC’s largest producer and de facto leader— hired former U.S. Solicitor General Ted Olson, now partner in law firm Gibson, Dunn & Crutcher LLP, to lobby against the proposed NOPEC bill.
Related: U.S. Oil Production May Jump To 14 Million Bpd By 2020
In July this year, senior OPEC officials gathered in Vienna to discuss the NOPEC bill with international law firm White & Case, and the law firm advised refraining from mentioning oil price in public discussions, two sources familiar with the matter told Reuters.
OPEC also sent a letter on August 1 to the ministers of the member states, urging them to avoid referring to oil price when discussing oil policy, which is a break from past practices, when Saudi Arabia would usually point to a preferred price of oil.
“I would like to call upon OPEC Member Countries, as well as our participating Non-OPEC colleagues, to refrain from any reference to prices in their commentary about our collective efforts or oil market condition,” UAE Energy Minister Suhail Al Mazrouei, who holds the rotating OPEC presidency this year, wrote in the letter seen by Reuters.
“We solemnly believe that market stability, and not prices, is the common objective of our actions,” he says.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.