NOPEC Bill Gains Momentum in the U.S. Congress

The U.S. Senate Judiciary Committee advanced a bill that looks to rein in OPEC+ after the oil producing group led by Saudi Arabia and includes Russia this month agreed on an oil output cut. The legislation could be up for debate after the Nov. 8 midterm elections. The legislation, called No Oil Producing and Exporting Cartels (NOPEC), has gained momentum in the Congress after OPEC+ decided on Oct. 5 to slash oil production by 2 million barrels per day (bpd).

OPEC+ decided to go through with production cuts despite lobbying from the Biden Administration. Biden’s Democrats worry that high gasoline prices could put a dent to their efforts to keep control of the Congress after the midterms.

The Senate Judiciary Committee, which easily passed the bill in May, moved the bill on Tuesday to the Senate floor.

Republican Senator Grassley, who sponsored NOPEC, tried to attach the legislation to the annual defense policy bill but failed. Still, it could be attached to another legislation later this year.

The legislation’s future is now in the hands of Democrat Senate Majority Leader Schumer. The fact that Senate’s schedule will be packed after the elections could prevent the bill’s consideration.

“What Saudi Arabia did to help (Russian President Vladimir) Putin continue to wage his despicable, vicious war against Ukraine will long be remembered by Americans. We are looking at all the legislative tools to best deal with this appalling and deeply cynical action, including the NOPEC bill”. Schumer said on Oct. 6, one day after OPEC+’s decision.

If passed by both chambers of Congress and signed by Biden, NOPEC would change U.S. antitrust law to revoke the sovereign immunity that has protected OPEC+ members and their national oil companies from lawsuits over price collusion.

It is unclear exactly how a federal court could enforce judicial antitrust decisions against foreign countries. The United States could also face criticism for its attempts to manipulate markets by, for example, its planned release of 180 million barrels of oil from the emergency oil reserve between May and December.

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