| This time - through the WTO Fearing a renewed rise in oil prices, which are already approaching $50 per barrel on the New York stock exchange, American senators made another attempt to fight OPEC. The cartel decided to reduce its production back in December, and now the organization does not rule out that at the next summit, scheduled for January 30, production volumes will be reduced again. In a letter sent to OPEC chief Kuwait Oil Corporation President Sheikh Ahmad Fahd Al-Sabah on January 14, five Democratic senators warned that the use of OPEC's oil restriction program could be considered a violation of the rules of the World Trade Organization (WTO), where includes more than half of the cartel countries. True, experts are confident that the Americans’ claims are unlikely to find a response in the souls of the oil ministers, especially since OPEC has enough counterarguments in the dispute that has begun.
In their letter, the senators note: “More than half of OPEC members are also members of the WTO, and WTO rules prohibit countries from imposing export quotas, and OPEC's use of export quotas appears to us to be a potential violation of WTO rules. Current high oil prices are harming the American economy. We will continue to monitor the situation closely, and we are prepared to take appropriate action to ensure that American families and businesses have access to energy,” Bloomberg quoted the senators’ letter as saying.
America, the largest consumer of oil, has been fighting for many years with OPEC, which produces about 30% of global production. At its last session, held on December 10, OPEC decided to maintain quotas at 27 million barrels per day, but since actual production exceeded official volumes by almost 1 million barrels per day, the organization obliged its members to bring it into line with the standards. It should be taken into account that in the second quarter after the end of the heating season, demand traditionally falls. Therefore, there have already been suggestions that OPEC may reduce production even further.
The OPEC secretariat in Vienna is aware of the Americans' claims. The head of the cartel's public relations department, Abdurrahman al-Khareiji, told Interfax that the letter "will be discussed by OPEC ministers at the next conference, and in addition, a group of lawyers will work with it."
Experts believe OPEC has room to defend itself. Although the organization includes five of the ten OPEC countries, the cartel's largest producer, Saudi Arabia (30% of the cartel's production), and Iran have not joined the WTO. As the Department of Access to Foreign Markets of the Ministry of Economic Development explained to Vremya Novostey, the WTO provisions do indeed contain a rule according to which the parties must strive to abolish any restrictions in mutual trade, “whether in the form of quotas, import or export licenses or other measures other than duties , taxes and other fees" (Article XI of GATT - General Agreement on Tariffs and Trade). However, this rule has exceptions: in particular, if the country takes measures related to the conservation of exhaustible natural resources. If such measures are carried out simultaneously with restrictions on domestic production or consumption (Article XX GATT (g) and do not constitute a discriminatory or hidden restriction on international trade, they will not be considered contrary to GATT.
“In the case of OPEC, most likely, a lot depends on the argumentation and actual formalization of the production limitation,” says an expert from the Ministry of Economic Development. And Mikhail Perfilov, development director of the Moscow representative office of Argus, notes that OPEC could use a counterargument by reminding Washington that the US strategic oil reserve is also a tool for influencing the world market.
The reserve, located in former salt mines near the Gulf of Mexico, was created precisely to ensure uninterrupted supply to the country’s domestic market in the event of problems with the import of raw materials and is intended to prevent the associated sharp rise in prices. It currently stores 674 million barrels, according to Argus. The last time the United States lent oil from its reserves was in October last year (5.4 million barrels) to “assist American companies that suffered losses from Hurricane Ivan.” “This period coincided with the most significant increase in the price of raw materials last year and can be considered as a hidden form of influence on the market in order to reduce prices,” says Mr. Perfilov. In addition, the expert notes, there is currently no shortage of oil on the market, and the main reason for rising prices is the lack of refining capacity in the United States and the relatively low reserves of diesel fuel in the country, which in the event of a cold spell could cause a shortage. “Americans partly need to look for the reasons for high prices at home,” the analyst believes. Vera SITNINA, Denis REBROV |
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