With gas and fuel costs rising for most of 2022, members of Congress are looking to take action against oil-producing countries they accuse of artificially raising the price of oil. The bipartisan No Oil Producing and Exporting Cartels Act (NOPEC) would specifically target the group of countries in the Organization of the Petroleum Exporting Countries (OPEC), which includes Russia and Saudi Arabia.
The bill would adjust U.S. antitrust law to allow the U.S. attorney general to bring lawsuits against OPEC countries and their state-owned oil companies for price fixing, which is illegal in the U.S. In October, OPEC announced it would reduce oil production quotas by 2 million barrels a day, limiting supply and increasing the price of oil around the world. The move was led by Saudi Arabia, the largest oil producer in the group.
Some U.S. lawmakers argue that the decision is intended to help Russia, which relies on oil and gas revenues, in its war against Ukraine. Others argue it was a market-driven choice given the expectation of a possible global recession and subsequent decreased demand for oil. During the 2008 global financial crisis, oil prices decreased from $100 a barrel in September to $40 a barrel in December of that year, according to The New York Times.
While the Biden administration has not come out in support of the bill, it has made sveral attempts to lower the price of gas and oil, including releasing stores from the nation’s Strategic Petroleum Reserve.
The White House has voiced concern over OPEC’s decision to cut oil production and specifically called out Saudi Arabia, questioning the U.S.’s relationship with the Middle East country.
“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 in October, referring to a larger group that includes the OPEC countries.
After passing a Senate committee 17-4 in May, the NOPEC bill moved to the Senate floor after OPEC’s October decision. The legislation will likely not be debated until some time after the midterm elections, with Senate Majority Leader Chuck Schumer (D-N.Y.) saying it will be a way to hit back at Saudi Arabia.
“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,” he wrote on Twitter. “We are looking at all the legislative tools to best deal with this appalling and deeply cynical action, including the NOPEC bill.”
Meanwhile, Sen. Chuck Grassley (R-Iowa), who sponsored the bill, said that he would add the NOPEC bill to the National Defense Authorization Act as an amendment, giving it another chance of passage. “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 a statement.
While the bill has bipartisan support among lawmakers, some analysts argue that going after OPEC members could backfire on the U.S. and other countries that rely on foreign oil supplies. “We could see a reduction in global oil supply as a result” of legally challenging OPEC members, Ellen Wald, a senior fellow at the Atlantic Council, said in an interview with NPR. “We could have countries not wanting to sell to the U.S., which is an important part of our global oil supply. We could also see these countries retaliate against U.S. interests in their countries, including nationalizing American oil interests in those countries.” Claudio Galimberti, a senior analyst at Rystad Energy, agreed and said NOPEC could actually be self-defeating. “A lawsuit is open to all sorts of retaliation from OPEC, which would actually decrease, not increase, the supply of oil,” he told The Hill. “The only solution to low supply from OPEC is more supply from elsewhere.”
Some Senate Republicans have stated that they are not willing to work with Democrats on the issue.
For example, Sen. John Barrasso (R-Wyo.) told Fox News that NOPEC is “not going to go anywhere,” adding his preference to rely more on American oil sources. “We need American energy,” he said. “We have it here.”
Should gas prices continue to rise, consideration of the NOPEC bill will likely continue to circulate.
For more background, see the January 2015 issue of Congressional Digest on “The Keystone XL Debate.”
