The U.S. Senate Judiciary Committee moved on Tuesday the bill that would allow the U.S. to sue OPEC for antitrust behavior and market manipulation to the Senate, Congress records show.
The so-called No Oil Producing and Exporting Cartels (NOPEC) Act, which proposes to amend the Sherman Act to make oil-producing and exporting cartels illegal, was placed on the Senate Legislative Calendar under General Orders.
Chances are that the bill won’t be debated until after the midterm elections on November 8, but that will depend on whether Senate Majority Leader Chuck Schumer moves the bill for debate. Considering the packed legislative schedule before the midterms, the NOPEC bill could only realistically be up for discussion after the elections, Reuters notes.
NOPEC has been an on-and-off topic for U.S. lawmakers and Administrations for over two decades but has never moved past discussions at committees in Congress. Forms of antitrust legislation aimed at OPEC were discussed at various times under Presidents George W. Bush and Barack Obama, but they both threatened to veto such legislation.
NOPEC was passed by the Senate Judiciary Committee in May this year, but calls for passing such legislation have intensified since the OPEC+ group decided in early October to reduce their headline oil production target by 2 million bpd as of November.
Following the OPEC+ decision, Republican Senator Chuck Grassley, author of the bipartisan NOPEC Act, called for action “to hold foreign oil producers accountable for colluding to fix global oil prices.”
“If this administration insists on making us more dependent on less friendly, less environmentally conscious foreign oil producers, we should at least be able to hold them accountable for their unfair price fixing. My bipartisan NOPEC Act would crack down on these tactics by the foreign oil cartel,” Senator Grassley said in early October.
The White House has vowed a response to what it described as a “short-sighted” and “misguided” decision of the OPEC+ alliance.
By Tsvetana Paraskova for Oilprice.com
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I waiting to see how that will affect the economy if russia decreased production again by 2 million barrel and saudi with another 1 million barrel?
and what if the saudi bring Xi to sign the petro-Yuan Treaty for example?:))
i am waiting to see :)))
The US can’t sue OPEC+ or any of its members under the NOPEC Bill or US anti-trust laws for so-called cartel-like activities since OPEC+ isn’t a cartel. Therefore threatening OPEC+ and its members is hot air.
Moreover, NOPEC+ and US antitrust laws only have jurisdiction in the United States but no extraterritorial jurisdiction.
Furthermore, it is far more dangerous for the US to sue OPEC+ and any of its members since retaliation by OPEC+ members will be far more damaging to its financial system and economy than any damage inflicted on OPEC+ members. This will come in the form of replacing the petrodollar by the petro-yuan.
Saudi Arabia and UAE are already seriously mulling over accepting payment in the Chinese petro-yuan for their crude exports to China, a development that will probably become a reality soon. Were China to pay for its almost 12.0 million barrels a day (mbd) of crude imports in petro-yuan, Russia to sell its 8.0 mbd of exports in ruble, Venezuela and Iran to accept the petro-yuan for their exports and India to pay in rupees for its crude imports, the petrodollar will certainly lose an estimated 48% of global oil trade. If OPEC+ members join Saudi Arabia and UAE in adopting the petro-yuan, this could rise to 60%. By undermining the petrodollar, the US financial system and therefore the US economy will also be undermined. This could possibly lead to a devaluation of the dollar by one quarter to one third of its current value.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert