The Senate Judiciary Committee on Thursday voted 17-4 in favor of a bipartisan bill that would expose the Organization of the Petroleum Exporting Countries and its allies to antitrust lawsuits, sparking chatter about whether such legislation has a chance this year.
There are reasons why the No Oil Producing and Exporting Cartels Act is more likely than ever to become reality, according to Benjamin Salisbury, director of research at Height Capital Markets.
“Democratic policymakers are increasingly threatened by inflation, especially in fuel prices, with few tools to fight back. OPEC+ in general and Saudi Arabia specifically have been cool to President Biden’s appeals to increase production. Moreover, Saudi’s alignment with OPEC+ including Russia during the Ukraine war exacerbates the chasm between Biden and MBS, making opposition to the bill more politically dangerous for policymakers,” Salisbury said in a note on Friday, referring to Saudi Arabia’s
crown prince, Mohammed bin Salman.
On the other hand, the Height analyst said there are also reasons to think that success for the NOPEC Act is “less likely than ever,” including the fact that “there is questionable evidence for OPEC as a price setter, in our view, except in managing drops in demand to the benefit of the U.S. oil industry.”
Versions of the legislation have been around since 2000 and have gotten committee approvals, but never become law.
“Opposition from the U.S. oil industry
Saudi Arabia and other U.S. industries fearful of retribution have generally slowed it down,” Salisbury said.
From MarketWatch’s archives (2007): House takes aim at OPEC, while White House threatens veto of bill that would allow legal action
President Joe Biden’s administration does not currently have an official position on the NOPEC Act, according to White House press secretary Jen Psaki.
“The potential implications and unintended consequences of this legislation require further study and deliberation, particularly during this dynamic moment in the global energy markets brought about by President Putin’s invasion of Ukraine,” she said Thursday, referring to Russian leader Vladimir Putin.
“So, we’re taking a look at it and certainly have some concerns about what the potential implications could be,” Psaki told reporters during a briefing, one of her last before she leaves the White House.