US Legislators threaten OPEC
The US congress will soon be considering legislation that would allow the US government to prosecute any OPEC member country it believes is fixing oil prices.
International oil companies have voiced their concerns and opposition to the proposal while warning about possible retaliation if it passes successfully.
The “No Oil Producing and Exporting Cartels Act 2019” bill was presented to the House of Representatives on Monday 18th of February and was approved by the judiciary committee the following day. The final remaining step is the vote by the entire House.
OPEC members are protected by sovereign immunity. The proposed legislation wants to eliminate sovereign immunity thus exposing any member to collusion allegations and prosecution based on US anti-trust laws which would in turn enable the US government to seize OPEC member assets on American soil such as the biggest US oil refinery, owned by Saudi Arabia.
This is not the first time such proposals were made. The most recent one in 2007-2008 almost managed to pass but ultimately failed because then president Bush Jr. stated that he would veto it. This time however, given president Trump’s strong dislike for OPEC has people fearing that it could manage to pass and be put in effect.
The White House has not yet publicly commented or taken an official stance, but Trump has been frequently tweeting frustration and criticism on soaring oil prices.
It has been said that OPEC’s decision to curb supplies and bolster prices during the last two years ended the 2014 Oil Crisis and according to OPEC’s secretary-general, Mohammad Barkindo, it had “helped to rescue the US Oil Industry.”
Additionally, people aware with the matter have stated that the anti-OPEC legislation attempts of the past and present were one of the main reasons Qatar decided to leave the organisation and is now seeking one-one trade agreements and partnerships with the US on natural gas.
US oil industry insiders and analysts are concerned that any possible retaliation by OPEC members following an anti-OPEC legislation taking effect would negatively impact US presence and involvement in OPEC countries which could bring severe and undesired geopolitical consequences. Additionally, it could hinder any future investments by OPEC members in the US.
More importantly however, the markets would be hit the worst with much greater volatility in crude prices and chaotic instability that could potentially damage the US oil industry.
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US Legislators threaten OPEC