Washington

Analysis | Making OPEC+ Subject to US Antitrust Law Will Backfire

Published

2 years ago

October 17, 2022

Analysis | Making OPEC+ Subject to US Antitrust Law Will Backfire

The very last thing the worldwide bond market wants on high of aggressive rate of interest hikes is extra bother. But, there’s extra coming, and from an unlikely supply: a quickly deteriorating relationship between the US and Saudi Arabia.

Earlier this month, Riyadh defied Washington, main the OPEC+ cartel, which incorporates Russia, to chop oil manufacturing. The transfer has put a ground on oil costs, which have stabilized between $90 and $100 a barrel. Consequently, inflation is more likely to be extra persistent than beforehand anticipated, most likely forcing central banks into additional financial tightening, which might chew bond buyers. This enraged the US.

Now American-Saudi relations are at their worst than because the assassination of journalist Jamal Khashoggi in October 2018. Since Riyadh agreed to chop oil output, the dominion and the White Home have engaged in a confrontation. The Saudi Overseas Affairs Ministry launched a press release saying that Washington needed OPEC+ to delay the reduce by a month — implying that the issue was actually the US midterm elections. The White Home responded accusing Riyadh of “spinning” excuses.

The important thing for what comes subsequent is NOPEC. That is the “No Oil Producing and Exporting Cartels” Act, a invoice that proposes subjecting OPEC to the Sherman antitrust legislation that was used greater than a century in the past to interrupt up the oil empire of John Rockefeller. If enacted, the White Home would be capable of sue Saudi Arabia and its allies, at present protected by sovereign immunity, for manipulating the worldwide oil market.

There’s an actual risk the invoice may even see the sunshine of day. However regardless of how a lot Biden needs to punish Saudi Arabia and OPEC for reducing oil provide, it will be far wiser to keep away from escalating the laws. In any other case, the danger is that Saudis dump US monetary belongings, redirect oil gross sales and overtly discuss pricing oil in different currencies.

For the final 25 years, NOPEC has been a staple of Washington — at all times a risk however by no means a legislation. President after president, whether or not Republican and Democrat, have argued towards passing it. However Joe Biden, who as soon as supported an analogous invoice as Senator, has mentioned he’s able to work with Congress to curb OPEC affect.

If NOPEC was to turn out to be legislation — a giant if — OPEC nations could retaliate by dumping a few of their monetary holdings in America. Because of this NOPEC may come at a giant worth for the US.

As of the top of July, Saudi Arabia, the United Arab Emirates, Kuwait and Iraq altogether held, immediately, about $246 billion in US Treasuries, in line with authorities knowledge. The actual quantity is more likely to be greater, as Center East nations additionally maintain bonds through tax havens equivalent to Luxembourg, the Cayman Islands, Bermuda, Switzerland and Eire. Though their cache is unlikely to be greater than 5%-10% of whole international holdings of American sovereign debt — and they’re more likely to be considerably decrease than the $970 billion held by China — dumping these belongings will rock an already jittery Treasuries market.

“There’s a actual danger that this diplomatic dispute may intensify,” mentioned Helima Croft, an oil analyst at RBC Capital Markets who’s nicely linked in Washington and Riyadh. “We’d not be shocked to see solutions within the coming days that Gulf nations may liquidate their US monetary holdings if NOPEC turns into legislation.”

From what I hear from officers within the Center East, the solutions are already coming loud and clear. Are these empty threats? Perhaps. In spite of everything, OPEC nations would probably endure losses in the event that they had been to dump the belongings and have few different choices to park their cash. However does anybody in Washington actually wish to check them?

NOPEC has lengthy been thought-about the nuclear choice. Nobody has answered what would occur subsequent if the invoice was handed. Would the US authorities ask for an antitrust investigation into OPEC? Would it not really go so far as suing the Saudis in federal courtroom? And if a lawsuit is filed and the US does win, can it implement any compensation? Would it not be well worth the potential retaliation?

The White Home wants to consider these questions — and whether or not it actually needs to reply them. Senator Chuck Grassley, a Republican from Iowa, has now hooked up NOPEC as an modification to the annual Pentagon spending invoice, giving it a severe likelihood of getting a vote on the ground of the Senate subsequent month. It’s unclear if the modification has the votes. However the final time the invoice got here this near passing was in 2007, when it bought accredited by the Home of Representatives in a 345-72 vote and the Senate by 70-23, solely to die after George W. Bush threatened a veto.

Biden should lastly determine the place he stands. In 2000, when oil costs had been rising, he co-wrote a letter as senator to then-President Invoice Clinton urging the White Home to sue OPEC both in US federal courtroom or on the Worldwide Court docket of Justice within the Hague. In 2007, Senator Biden was the co-sponsor of a model of the NOPEC invoice, however then he abstained in the course of the vote. For now, the White Home hasn’t mentioned whether or not it helps the laws.

NOPEC goes hand-in-hand with oil costs. If Brent crude stays underneath $100 a barrel, the invoice could die. But when costs rise, only a contact, it has a preventing likelihood of passing. If that’s the case, it’s more likely to create extra issues than it will resolve.

This column doesn’t essentially mirror the opinion of the editorial board or Bloomberg LP and its homeowners.

Javier Blas is a Bloomberg Opinion columnist overlaying power and commodities. A former reporter for Bloomberg Information and commodities editor on the Monetary Occasions, he’s coauthor of “The World for Sale: Cash, Energy and the Merchants Who Barter the Earth’s Assets.”

Extra tales like this can be found on bloomberg.com/opinion

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Washington

Early Storylines For Lions Playoff Matchup Against Commanders

Published

3 hours ago

January 13, 2025

Press Room

Early Storylines For Lions Playoff Matchup Against Commanders

The Detroit Lions (15-2) will welcome a Washington Commanders (13-5) team riding high after their first playoff victory in decades.

New head coach Dan Quinn has rebuilt the culture and has a young signal-caller that earned the respect of his teammates.

After defeating the Buccaneers, 23-20, a whole new challenge awaits the upstart NFC East squad.

Detroit is now rested and will be fully prepared to win in front of their home fans at Ford Field.

Dan Campbell has his team and the entire organization pulling in the same direction. In a season that is “Super Bowl or bust,” the back-to-back NFC North division champs are as primed as ever to represent the NFC in the Super Bowl that takes place in New Orleans.

Here are some early storylines Lions OnSI is following this week.

How Lions will handle rookie quarterback Jayden Daniels?

Washington’s rookie quarterback is the favorite to win NFL Rookie of the Year after an exceptional season. He completed 69 percent of his passes in the regular season and threw for 3,568 yards and 25 touchdown passes.

Daniels also is a dangerous rushing threat, as he rushed for 891 yards and six touchdowns. The Lions have struggled against mobile quarterbacks at points this season, as Buffalo’s Josh Allen gave them fits.

The Lions are 2-1 this season against mobile quarterbacks. Allen handed them a loss in Week 15, but the defense was able to contain Kyler Murray in Week 3 and Anthony Richardson in Week 12. Allen rushed for 68 yards, while Richardson ran for 61 and Murray notched 45.

Though it will be the first time the Lions have faced off against Daniels, it won’t be the first time he’s seen Detroit rookie cornerback Terrion Arnold. The two players matched up against each other in the SEC for two seasons, with Arnold recording an interception for his Alabama team against Daniels and LSU.

Can Commanders stop Lions rushing attack?

The Lions’ offense has been one of the league’s best this season, and the run game has been a huge part of that success. Detroit’s offense stands to get a boost this week as well, as David Montgomery is expected to return for Saturday’s game.

Jahmyr Gibbs earned NFC Offensive Player of the Month honors in Montgomery’s absence and will still get plenty of touches. Against the 30th-ranked Commanders rushing defense, both Gibbs and Montgomery could stand to have big days.

Will Aaron Glenn blitz at a high rate still?

With all the injuries to Detroit’s defense, the game plan for defensive coordinator Aaron Glenn has involved plenty of blitzing. Against the Vikings in Week 18, the defense utilized a number of different blitz packages to get after Sam Darnold.

Daniels has had plenty of success against the blitz, posting an ESPN QBR of 90.3 which ranked third in the league. If the Lions are not disciplined in their rush lanes, then they will also risk giving up long scrambles as Daniels can evade defenders.

The rookie passer has proven his abilities to handle blitzes, so whether or not Aaron Glenn continues to do so could be a deciding factor in Saturday’s game.

Lions injuries to monitor

The Lions, like most weeks, have some injuries to monitor heading into the Divisional Round. Both cornerback Terrion Arnold and offensive lineman Kevin Zeitler suffered injuries in Week 18, and the bye week gave them an extra week to recover.

Arnold has been reported as day-to-day with a foot injury, while Zeitler was given an optimistic prognosis by Campbell last week. Things didn’t sound as good for defensive lineman Pat O’Connor.

We should learn more about the availability of all these players on Monday, as Dan Campbell is scheduled to speak with the media.

Odds: Lions Are 8.5-Point Favorite Against Commanders

Lots of familiarity between Lions and Commanders this week. Commanders have former Lions QB David Blough and OC Anthony Lynn on staff.
The Lions have former Washington QB Mark Brunell, LB Shaun Dion Hamilton and WR Antwaan Randle El on staff. @DetroitPodcast
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— Christian Booher (@CBooher_) January 13, 2025

Commanders have familiar faces on their staff

Part of the reason the Commanders had success this season is the staff Quinn assembled.

Offensive coordinator Kilff Kingsbury is a respected play-caller and will again see his name surface for available head coaching jobs.

Former Lions quarterback David Blough, who reportedly aided in the game-winning touchdown call against the Eagles, is currently serving as the Commanders assistant quarterbacks coach.

Former Lions offensive coordinator Anthony Lynn was eventually demoted by Campbell before being let go.

Lance Newmark is now in his first season as assistant general manager of the Commanders.

Newmark joined the Commanders with nearly three decades of NFL experience, including 26 seasons with the Detroit Lions. In Detroit, he most recently served as the senior director of player personnel.

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Washington

BIZ BUZZ: Antonios go to Washington

Published

15 hours ago

January 12, 2025

Press Room

Donald Trump is scheduled to be inaugurated—again—as the president of the United States on Jan. 20 in Washington.

Among those who will witness his return to power as the 47th president of the world’s largest economy are some of his old friends from the Philippines.

We’re talking about Century Properties Group founder and chair Jose EB Antonio and his wife, Hilda.