Momentum is gathering in Congress in support of legislation that would challenge the OPEC+ group of oil-producing nations, which recently agreed to production restrictions that will benefit Russia while raising US prices.
The US Senate has revived a proposal known as “NOPEC”, defined as “no oil producing and exporting cartels”–an obtuse reference to the Saudi Arabia-led organization of oil-producing states. The measure was recently floated by Senate Majority Leader Chuck Schumer, seemingly a response to the organization’s decision to cut back its monthly output.
“We are looking at all the legislative tools to best deal with this appalling and deeply cynical action, including the NOPEC bill,” Schumer said in a statement.
If passed, the NOPEC measure would allow the Justice Department to sue OPEC+ countries and their state-owned oil firms under antitrust laws in the United States.
The measure is gaining bipartisan momentum, with Republican Senator Chuck Grassley saying in a statement that the NOPEC bill, which he sponsored, will be added as an amendment to the National Defense Authorization Act, which Congress is anticipated to take up when it returns in November.
“My bipartisan NOPEC Act would crack down on these tactics by the foreign oil cartel. It’s already cleared the Judiciary Committee on a bipartisan basis, and there’s no reason why it shouldn’t pass as a part of our upcoming defense authorization effort. Our energy supply is a matter of national security,” Grassley said in the statement.
The bill was approved by the Judiciary Committee on a 17-4 vote, with support from every committee Democrat as well as GOP senators.
OPEC and its allies agreed last week in Vienna to proceed with cutting oil production by 2 million barrels per day come November, which amounts to about 2% of total global demand–the biggest cut it implemented since the pandemic.
The White House reportedly used all available resources to lobby the oil cartel ahead of their Vienna meeting, and is now left “having a spasm and panicking,” according to the people familiar with the matter. US President Joe Biden said he is “concerned” with OPEC’s decision, going as far as to call the move “a hostile act” and a “total disaster.”
But the Middle Eastern state–considered the de facto leader of the oil-exporting nations–countered this argument in its statement. The kingdom revealed that the Biden administration–through continuous consultation–has been asking to delay the planned oil output cut by a month.
However, OPEC+ seemingly thumbed down the request, citing the delay “would have had negative economic consequences.”
The White House has not openly backed the measure, but it has stated that it will “consult with Congress on additional tools and authorities to reduce OPEC’s control over energy prices.” However, Biden is reportedly considering a review of the country’s relations with Saudi Arabia given the production cuts.
“Certainly, in light of recent developments and OPEC+’s decision about oil production, the president believes that we should review the bilateral relationship with Saudi Arabia and to take a look to see if that relationship is where it needs to be and that it is serving our national security interests,” White House national security spokesperson John Kirby told reporters during a call.
In 2007, the House passed a version of the measure in a largely bipartisan vote, but the Bush administration rejected it.
OPEC, for its part, reminded Washington that the group is a “technical organization” rather than a political one, and won’t cater to Biden’s demands even if it means damaging relations with the US.
Information for this briefing was found via The Hill and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.