House Committee Approves Anti-OPEC Bill

A committee from the House of Representatives has approved a bill aimed at making OPEC members liable to U.S. antitrust legislation, Reuters reports, adding the prospects of the bill ending up as law were not certain yet.

The No Oil Producing and Exporting Cartels Act, or NOPEC, as it’s more widely known, would, if passed into law, allow the U.S. attorney general to sue separate members of OPEC or the whole group for collusion. At the moment, OPEC members separately and together are protected by sovereign immunity.

This is not the first bill aimed at making it possible to target OPEC with anti-cartel measures. In fact, Reuters recalls, bills of this kind have been considered in the House of Representatives on multiple occasions during the past two decades. However, none of them has ever reached full House vote and it remains unclear whether this one will.

Chances are it won’t, in light of Washington’s close ties with Riyadh, the de factor leader of OPEC. The relationship is equally important for Saudi Arabia, but the threat of lawsuits for collusion will likely lead to a quick reaction.

President Trump, according to Reuters, has in the past, before taking the presidency, spoken in support of such a law. Since his entry into office, however, he has not spoken in favor of a NOPEC bill, instead making a point to note the importance of Saudi Arabia for the United States, chiefly because of the huge arm sales deals that Riyadh offers Washington.

Political considerations aide, the chances of the bill becoming a law are also reduced by low oil prices and lack of support from the industry. International oil companies have warned of retaliatory measures from OPEC, and the American Petroleum Institute has also spoken against such a bill, saying that rising U.S. crude oil production is already diminishing OPEC’s global market influence.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• Tesla Disputes Study That Icy Weather Leads To 41% Drop In EVs Range
  
• How Washington Could Spoil The OPEC+ Alliance
  
• The Natural Gas Price Plunge Isn’t Over Yet