OPEC Warns Wall Street on NOPEC
OPEC is sending a clear message to Wall Street banks and big investors: If Washington passes legislation that would allow the US government to sue the organization; the first victim will be shale.
Suhail Mohammed Al Mazrouei, the United Arab Emirates oil minister and the former president of OPEC, told a group of US financiers that if the so-called NOPEC bill becomes law, the organization would stop working and therefore every member would raise production to maximum capacity, causing a crash in oil prices, according to people who attended the meeting, Bloomberg reported.
The discussion took place in a closed-door meeting between Organization of Petroleum Exporting Countries officials and the financial community on the sidelines of the annual CERAWeek conference by IHS Markit in Houston, according to the people who asked not to be identified because the talks were private.
While lower oil prices would be pleasing to consumers -- and to a US president who has called several times for OPEC to keep output levels high -- the warning is an example of how the organization is trying to convince US shale producers and their financial backers that they should join the effort to try to stop the bill.
The American Petroleum Institute has stated its opposition to the measure, but OPEC is taking aim at the financial industry that plays a big role providing billions of dollars in debt and equity to US drillers.
OPEC has been publicly vocal about its opposition to the measure, without painting a doomsday scenario as it did privately.
"NOPEC legislation won’t serve the US interest," OPEC Secretary General Mohammad Barkindo said on Tuesday in Houston.
Some oil executives have joined in the fight. The Chief Executive Officer of London-based BP Plc said Tuesday that one of his messages to the Trump administration is to avoid disrupting oil markets too much. He singled out the NOPEC legislation, which “could have severe unintended consequences if it unleashed litigation around the world.”
source: Financial Tribune
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