If China was dumping a product in the US market, and businesses in the US were not allowed to sell a similar one in the Chinese market, politicians would be up in arms at the injustice of it all. Well, that’s exactly what’s happening in the oil market now.
To provide some perspective, this is not a new issue. Back in 1999, The U.S. Commerce Department on 9 August dismissed an antidumping and countervailing duty petition filed by a coalition of independent U.S. oil producers against Venezuela, Mexico, Iraq and Kuwait, saying that there was not enough industry support for the petition to move forward. The decision marks the first time the U.S. Commerce Department has rejected an antidumping petition since the WTO agreement on antidumping and countervailing duties went into effect in 1995.
The regional U.S. group of independent oil producers — the Committee to Save Domestic Oil (SDO), on 28 June filed dumping and countervailing duty cases against the four countries, accusing them of maintaining pricing policies designed to drive U.S. producers out of business (see BRIDGES Weekly Trade News Digest Vol. 3, No. 26, 5 July 1999, http://www.ictsd.org/html/story7.05-07-99.htm).
Large oil companies such as Exxon Corp. and Texaco Inc. opposed the SDO petition, arguing that if antidumping duties went forward Venezuela, Mexico, Iraq and Kuwait would be forced to sell oil normally sold to the U.S. on the world market, causing a glut in oil supply and driving down prices across the world (including the U.S.). On hearing that the U.S. Department of Commerce would not press dumping charges, Venezuelan Energy Minister Alia Rodriguez expressed satisfaction, saying that this has “staved off the grave risk of an upset on the global oil market, whose consequences would have been disastrous for everyone – producers and consumers alike.”
In response to the Commerce Department decision, Mexican officials announced that Mexico would move forward with plans to abolish a four percent tariff on US natural gas imports that would have taken effect on 1 July, but which were put on hold when SDO filed its anti-dumping suit. SDO plans to appeal the case to the Court of International Trade in New York, according to sources close to the petitioners.
“Combining national interests with free markets,” IPS, 16 August 1999; “Commerce dismisses crude oil case solely on domestic opposition,” INSIDE US TRADE, 13 August 1999; “Oil fight: industry image hurt clout in dumping case,” DOW JONES, 10 August 1999; “Mexico says to drop tariff on U.S. gas imports,” REUTERS, 10 August 1999; “US energy secretary praises oil dumping ruling,” REUTERS, 9 August 1999.
For nearly 40 years, US companies have been banned from exporting American crude, a policy imposed after the Arab oil embargo of the 1970s shook the US economy to its core. But as domestic production hits record levels, the administration of President Obama is loosening the longtime restriction, recently allowing two Texas companies to ship an ultralight crude oil known as condensate to overseas markets.
I think its time for the domestic oil and gas industry to strike back. File suit immediately against the U.S. Government and have this ban lifted. It’s unAmerican to tie the hands of U.S producers while the Saudi’s dump oil here.