But the plan didn’t work: the Saudis did the exact opposite. A few weeks ago, they pushed through a production cut in the OPEC cartel, the oil price rose and with it Putin’s export earnings. Expensive gasoline is Biden’s biggest concern in the Nov. 8 congressional election.
What the supposedly most powerful man in the world failed to achieve through diplomatic channels, a former top German official now wants to achieve in court: Armin Steinbach, former head of department in the economics and finance ministries. Steinbach has sued the Saudi state oil company Saudi Aramco, the most valuable company in the world, in Berlin, along with other Arab oil companies and Opec.
The case offers material for a political thriller, maybe even for a state affair. Steinbach, 44, now a professor at the Paris University of Economics and Business, wants to ask OPEC and the state-owned companies that support it as market manipulators to pay.
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His claim is noted in the statement of claim as follows: “Damage due to violation of antitrust law”. Steinbach refers to studies according to which the OPEC cartel has significantly increased the price of oil.
Fuel bills for the scooter should prove antitrust violations
Anyone who knows Steinbach knows that during his time in Berlin he occasionally rode his motor scooter. The fuel bills he has accumulated over the years now serve as a plea. The amount in dispute is hardly worth mentioning: it is just 50 euros. But Steinbach is not concerned with money either. It’s about the basics.
“If my lawsuit is successful, it would be recognized for the first time in court that OPEC is a cartel,” explains Steinbach. “Then every German could sue Opec for damages.” His lawsuit thus represents a “financial threat” to the cartel. Since it is unlikely that Opec will respond to a request for payment, the court could order the confiscation of assets from companies in Europe .
>> Read here: Test of strength with Opec – Biden wants to push down the price of oil
Steinbach, who is both an economist and a legal scholar, is breaking new legal ground with his lawsuit. There has never been a comparable case in Europe, he explains, only in the USA: there, however, the “extensive immunity case law” prevented the plaintiffs from being successful.
Steinbach expects better chances at the district court of Berlin. In his lawsuit, he explains that the oil companies cannot escape the reach of the German judiciary: unlike states, they are not entitled to any immunity because they are organized under private law. The fact that these are state-controlled companies does not change that.
What happens if a German court judges OPEC to be a cartel? The case could still be tricky for politicians.
(Photo: Reuters)
“According to case law, the sole decisive factor is the legal independence of the company,” argues Steinbach. If the court follows his legal opinion, OPEC could collapse on European Union territory, he predicts.
However, there is still a long way to go until then. The case is currently in the “service phase”, which means that the other party is being informed about the lawsuit and has to name lawyers. It may be months, if not years, before the first oral hearing takes place.
Opec could react with a delivery stop
The case could still be tricky for German politics. Should Steinbach be successful, Opec should take countermeasures. It could impose delivery stops or respond with sanctions. A power struggle would begin – with a completely uncertain outcome.
>> Read here: What a US break with the Saudis could mean for the world
The fact that oil importers are looking for ways to defend themselves against price manipulation shows how things have changed since the oil crises of the 1970s: the G7 want to take action against Russia with an oil price cap in order to deprive Putin of his most important source of income to cut off. And in the USA, Congress is dealing with the “No Oil Producing and Exporting Cartels Act”, in short: Nopec.
The draft law provides for lifting the immunity of OPEC and the companies that support it, in keeping with Steinbach. Similar initiatives have repeatedly failed in recent years, not least for fear of provoking a wave of expropriations against US companies.
But anger in Washington at the behavior of the Saudis – there is talk of a de facto alliance with Putin – has reached such proportions that it is at least no longer unthinkable that Nopec could find a majority.
More: New sanctions: The EU wants to squeeze Russia’s oil revenues.