U.S. FederJudge has rule against OPEC

Published April 1st, 2001 - 02:00 GMT

According to a wire story from Platts on Fridayal , a U.S. federal judge has ruled rule an injunction against further OPEC antitrust in favor Carl Prewitt of Prewitt Enterprises, which operates a 1,500-gal/d Texaco filling station in Birmingham, Alabama. 

 

Senior US District Judge Charles Weiner, in a Mar 22 ruling in Birmingham, Alabama, granted an injunction against any further collusion by OPEC.  

 

Judge Weiner ruled the antitrust effect has been $4 to $6/bbl of excess costs, with 90 percent of that excess cost passed on to US consumers.  

 

"Accordingly, there has been an impact, indeed a substantial impact" on US product prices, reported Platts 

Weiner's one-year injunction bans OPEC or its partners from "entering any agreements among themselves or with third parties to raise, lower, or otherwise determine volumes of production and export of crude oil...or enforcing such agreements."  

 

The ruling could pose problems for OPEC members like Venezuela and Saudi Arabia which have substantial downstream assets in the US., Violation of a federal court injunction could expose them to various possible remedies, including potential fines, money damages and asset seizures, sources said to Platts. 

 

According to Platts, Texaco operator Prewitt, brought a civil anti-trust case against the OPEC a year ago after growing frustrated with rising gasoline prices.  

 

The lawsuit, was filed under the Sherman Act by the Birmingham-based firm of Straus & Boies.  

 

Michael Straus is formerly of New York firm Sullivan & Cromwell and ex-staff counsel to the Iran-US Claims Tribunal in The Hague. David Boies III is the son of the celebrity litigator who represented former Vice President Al Gore in Florida's election claims. 

 

OPEC, served with notice of the lawsuit at its Vienna headquarters, failed to respond. On Dec 11, Weiner granted a "default" ruling and certified class action for "all persons or entities who purchased refined products in the US from March 1999 to the present." Prewitt was designated the class representative, Platts reported. 

 

With the expert testimony from noted oil industry economist and consultant Philip Verleger that show that from its March 1998 production restraint accord, OPEC has conspired to fix and stabilize prices.  

 

Weiner in his Mar 22 ruling declared that without OPEC production restraints, US oil prices would have been just $18.84/bbl. with 90 percent of that excess cost passed on to US consumers.  

 

"Accordingly, there has been an impact, indeed a substantial impact" on US product prices, the judge ruled, citing Verleger's estimates of $80-$120-mil a day or $26-$40-bil a year.  

 

Weiner ruled their actions to restrain trade were clearly commercial, and therefore not protected by sovereign government rights, Platts wrote. 

 

This injunction against further antitrust conspiracy from OPEC members, could also touch to non-OPEC members Mexico, Norway,Russia and Oman for collaborating in the oil production quotas set up.  

(petroleumworld)  

 

 

© 2001 Mena Report (www.menareport.com)

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