A new instruction has been issued to all members of OPEC – not to talk about any price level. This is indeed the new guidelines given to its members. This is aimed at avoiding any future legal actions following an American law that could be introduced.
The directive is to avoid indicating any reference to any numerical number, and to just state that the oil prices are stable instead of stating that $70 or $80 is fair or justifiable level. The point is to just stay away from any numbers; no matter how high or low.
The concern is the possibility of the USA Congress introducing the NOPEC (The No Oil Producing and Exporting Cartels) Act. It was actually introduced in 2000 to enable the USA government to sue any organization that fixes prices based on their interests and at the expense of its economy. This was discussed during the terms of the previous US presidents but had faced resistance and objections. However, it was never introduced on the floor of US Congress.
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Nevertheless, this is becoming more of a reality under the current administration which can easily approve and pass it with the blessing of the present President. The current USA administration, since its inception, has been calling for lower prices and attacking any move made by OPEC. Nothing seems to satisfy them.
The oil prices are hardening because of their actions globally, and they are the only ones who can cause the oil prices to extend above $85 per barrel. The counter action by OPEC is to simply ignore any indication about the price level of the barrel of oil, and instead use wider language of stability to ensure the best interests of oil consumers.
They will also avoid any reference to collective action aimed towards a certain piece level. Stable oil prices has been the manifesto of OPEC since its creation, and it will work toward this goal but without declaring any number. It will not be easy task for OPEC ministers to avoid, in the view of the media, a press attack, but this is the only way. It has to keep quiet and not mention any numbers. Since America is pushing for NOPEC, OPEC must be prepared.
By Kamel Al-Harami
The views and opinions expressed in this article are those of the author and do not necessarily reflect the views and opinions of Al Bawaba Business or its affiliates.
