Us court bans OPEC from price fixing

Published April 5th, 2001 - 02:00 GMT

A U.S. federal court granted a one-year injunction to an Alabama-based company barring OPEC from fixing oil prices, it was reported on April 3rd. Prewitt Enterprises of Birmingham, Alabama had accused OPEC in a civil anti-trust case of conspiring to fix oil prices through supply agreements.  

 

U.S. District Court Judge Charles Weiner ruled on March 21st that OPEC could not implement any additional agreements concerning production levels.  

 

He said that OPEC is for the next year “restrained from entering any agreements among themselves or with third parties to raise, lower or otherwise determine production and export of crude oil.”  

 

OPEC members were not present at the court hearing, although court documents indicated that the group had been served notice at its Vienna headquarters by FedEx.  

 

There are few precedents for such suits, and the U.S. Ninth Circuit Court of Appeals determined in 1981 that courts could not make rulings against OPEC members, which are sovereign nations.  

 

However, legislation was introduced in the U.S. Senate on March 30th that would give U.S. antitrust regulators the authority to sue OPEC for setting production levels and fixing oil prices.  

 

Democratic Senator Herbert Kohl of Wisconsin, one of the bill’s co-sponsors, said that: “For years, this conspiracy has unfairly driven up the cost of imported oil to satisfy the greed of the oil exporters.  

 

Such blatantly anti-competitive action by the oil cartel violates the most basic principles of fair competition and free markets and should not be tolerated.” But, the legislation has little chance of becoming law.  

 

The plaintiffs’ lawyer, Michael Straus, said following the ruling that he “assumes a lawful order of the U.S. district court will be obeyed,” although how the court could enforce the injunction remains to be seen. 

(oilnavigator)  

 

© 2001 Mena Report (www.menareport.com)

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