• NOPEC, No Oil Producing and Exporting Cartels Act) was first introduced in 2000 and aims to remove sovereign immunity from US antitrust law.
Last week, Reuters reported that Saudi Arabia has threatened to ditch dollar oil trades to stop 'NOPEC'.
“The Saudis know they have the dollar as the nuclear option,” one of the sources familiar with the matter said.
“Let the Americans pass NOPEC and it would be the US economy that would fall apart,” another source said.
(NOPEC, No Oil Producing and Exporting Cartels Act) was first introduced in 2000 and aims to remove sovereign immunity from US antitrust law, paving the way for OPEC states to be sued for curbing output in a bid to raise oil prices].
In 21st century geopolitics, this is the ''grand daddy'' of all geopolitical red lines. Let me explain why.
The petro dollar economy was symbolically born on February 14, 1945 when King Abdul Aziz Ibn Saud of Saudi Arabia met with President Franklin D Roosevelt aboard the USS Quincy in Great Bitter Lake, Egypt.
The Saudi kingdom would sell its oil for US dollars, recycle surpluses into US treasuries [The kingdom has nearly $1 trillion invested in the US and holds some $160 billion in US treasuries] and the US would lend its legitimacy and protection to the kingdom.
Zbigniew Brzezinski said, “The three grand imperatives of imperial geostrategy are to prevent collusion and maintain security dependence among the vassals, to keep tributaries pliant and protected, and to keep the barbarians from coming together.
Saudi Arabia falls in the ''vassal'' category in Brzezinski's description.
There is plenty of Propaganda in the c21st discourse around Oil and ''resource'' wars but the lets do the Math. Depending on prices, oil is estimated to represent 2 percent to 3 percent of global gross domestic product.
At the current price of $70 per barrel, the annual value of global oil output is $2.5 trillion.
Trading in derivatives such as oil futures and options is mainly dollar denominated.
The top two global energy exchanges, ICE and CME, traded a billion lots of oil derivatives in 2018 with a nominal value of about $5 trillion [Reuters].
The c21st Oil Economy is a very big deal and Ryszard Kapuściński who wrote as follows about the oil and petrochemical dollar economy in Shah of Shahs.
“Oil creates the illusion of a completely changed life, life without work, life for free. Oil is a resource that anaesthetizes thought, blurs vision, corrupts.”― Ryszard Kapuściński, Shah of Shahs.
“Oil kindles extraordinary emotions and hopes, since oil is above all a great temptation. It is the temptation of ease, wealth, strength, fortune, power.
It is a filthy, foul-smelling liquid that squirts obligingly up into the air and falls back to earth as a rustling shower of money.” ― Ryszard Kapuściński, Shah of Shahs.
Therefore, in many respects whomsoever controls this Spigot because this is real cash can control the World.
Therefore one must also accept that access to oil "defined 20th-century empires and the petrodollar agreement was the key to the ascendancy of US as the world's sole superpower" The US dollar remains de facto world currency.
Accordingly, almost all oil sales throughout the world are denominated in US dollars. Since most countries rely on oil imports, they are forced to maintain large stockpiles of dollars in order to continue imports.
This creates a consistent demand for USDs. America’s war machine runs on, is funded by, and exists in protection of oil.
Threats by any nation to undermine the petrodollar system are viewed by Washington as tantamount to a declaration of war against USA.
It is typically a very bad idea to pronounce the ditching of the petrodollar in public. And to have your ''Vassal'' State do it in public speaks to a level of dissonance and mind-boggling arrogance at the heart of the Saudi court which I will return to momentarily.
Sure Muammar was a dictator as was Saddam but the proximate cause for their 'red in tooth and claw' deletions were their public pronouncements around ditching the dollar.
Gadhafi had a plan to quit selling Libyan oil in US dollars, and wanted payment instead in gold-backed “dinars” (a single African currency made from gold). Saddam wanted to be paid in Euros.
In a March 22 2018 Article in The Intercept ''MBS bragged to the Emirati crown prince and others that Kushner was “in his pocket,” The crown prince's antennae are completely scrambled.
Jared Kushner is no protection against the Petrodollar Deep State.
It is currently engaged with bring the Chavismo revolution [which was after all a revolution in its Monroe Doctrine Backyard] to heel but make no mistake that declaration of war by a 34 year old Saudi crown prince will have been heard real loud and real clear.
Therefore, he should not ask for whom the bell tolls. It is the bell he chose to ring.