With oil prices hitting fresh four-year highs of over 85 dollars, long-dormant proposals to allow the United States to sue OPEC nations are getting a fresh look in Congress, though they were once considered a longshot to becoming law. A U.S. Senate subcommittee will hear testimony on the so-called No Oil Producing and Exporting Cartels Act, or NOPEC, which would revoke the sovereign immunity that has long shielded OPEC members from U.S. legal action.
The bill would change U.S. antitrust law to allow OPEC producers to be sued for collusion; it would make it illegal to restrain oil or gas production or set those prices – removing sovereign immunity that U.S. courts have ruled exists under current law. Past U.S. leaders have opposed the NOPEC bill, but the possibility of its success may have increased due to President Donald Trump’s frequent criticism of the Organisation of the Petroleum Exporting Countries, and as some predict that Brent crude, the international benchmark, could reach $100 a barrel before long.
“OPEC is a pet peeve for him,” said Joe McMonigle, senior energy policy analyst at Hedgeye Potomac Research. “Everybody thinks he could easily support NOPEC.” Saudi Arabia is lobbying the U.S. government to prevent the bill’s passage, sources familiar with the matter said. Business groups and oil companies also oppose the bill, citing the possibility of retaliation from other countries.
OPEC controls output from member nations by setting production targets. Prices are up 82 percent following the cartel’s decision to cut output at the end of 2016, hitting $84 a barrel on Monday, and lawmakers have trained their ire on the group, saying it is again harming consumers and represents interference in free markets.