Trump ally seeks Opec unfair trade probe

FILE PHOTO: Gas flares from a burner tower on the Petroleos Mexicanos (Pemex) Pol-A Platform complex, located on the continental shelf in the Gulf of Mexico, 70 kilometers offshore from Ciudad del Carmen, Mexico, on Friday, March 28, 2014. Oil extended losses below $  60 a barrel amid speculation that OPEC's biggest members will defend market share against U.S. shale producers. Photographer: Susana Gonzalez/Bloomberg©Bloomberg

A US congressman who has been advising Donald Trump on energy policy is leading a plan to investigate Opec, the oil producers’ cartel, for unfair trade practices.

Kevin Cramer, a Republican member of the House of Representatives for the oil-producing state of North Dakota, said the US needed to examine whether the cartel was acting anti-competitively to strengthen its hold over the market, because of the importance of energy to national security. 

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He is one of the sponsors of a bipartisan bill to establish a commission that would investigate the actions of Opec and state-controlled national oil companies around the world, and propose possible remedies. 

The move comes at a time of strains in the relationship between the US and Saudi Arabia, Opec’s de facto leader, over the possible roles played by Saudi nationals in assisting the 9/11 terror attacks. 

Opec has been riven by disagreements over the past couple of years and is seen by analysts as having lost its influence over the market. However, concern about the cartel has grown in the US as a result of the collapse in oil prices, which has driven more than 130 US companies into bankruptcy and cost 131,000 jobs.

One of the factors behind that collapse was Saudi Arabia’s strategy of continuing to produce at high levels above 10m barrels per day, rather than cutting output to ease the glut of oil. 

The Opec bill, which is also sponsored by representatives Trent Franks, another Republican, and Collin Peterson, a Democrat, would establish a bipartisan commission to assess whether the cartel was engaged in anti-competitive behaviour, and to recommend possible policy measures involving “taxes, trade, defence, and research and development, and diplomacy, among others.” 

Mr Cramer told the Financial Times he was not prejudging the outcome of the inquiry, but “I want to be sure there aren’t games being played to create monopolies.” 

We don’t want to hamper our own ability to sell into the global market, but we want to be sure our competitors and us are all playing by the same rules

– Kevin Cramer, Republican congressman from North Dakota

He added that he expected Mr Trump, the presumptive Republican nominee for the presidential elections in November, to be receptive to the idea. 

“It’s like everything he talks about: we want fair, transparent trade,” Mr Cramer said. 

“We don’t want to hamper our own ability to sell into the global market, but we want to be sure our competitors and us are all playing by the same rules.” 

Mr Trump has in the past proposed restrictions on the trade in oil, raising the possibility that the US could ban imports of Saudi oil to pressure the kingdom to do more to fight Isis, the Islamist extremist group. 

Past attempts in the US to use the law against Opec, including an effort launched in 2008 to sue it for antitrust violations, have proved ineffective. Mr Franks said the first objective of his bill was simply to highlight the cartel’s role. 

“If our bill does nothing more than to raise this question on to the agendas of business leaders and policymakers . . . it will have achieved something,” he said. 

Ultimately, he added, the goal was to reduce US dependence on imported oil. 

“If we didn’t have to buy so much oil from certain parts of the world, terrorists would not have enough money to buy a box of sparklers to use against us,” he said. 

The links between oil production and terrorism have been brought into focus in the US by calls for publication of 28 redacted pages from the 2002 congressional report on 9/11. The pages have been said to include reports of the involvement of Saudi officials in the attacks.

On Tuesday a bill that could allow the families of those killed on 9/11 to sue Saudi Arabia for damages was passed in the US Senate, although President Barack Obama is expected to veto the legislation. 

Mr Cramer will on Thursday morning speak at the launch of a report from Securing America’s Future Energy (Safe) a think-tank backed by business executives and former military and diplomatic leaders that works to reduce US dependence on imported oil. 

Robbie Diamond, the president of Safe, said he thought the plan for an Opec commission stood a good chance of making progress. 

“There is a populist feeling [among Americans] that they are not catching a break, and the big guys are winning,” he said. “Opec is a great representative of that.”

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