Experts admit standoff between US and OPEC
US lawmakers are forging ahead with legislation against oil cartels for their practice of boosting oil prices. On April 26, the US House Panel discussed a bill that would allow the US to file lawsuits against the OPEC and other oil producing countries. The draft bill is still on the table at the House of Representatives.
Nevertheless, some experts want to calm down investors, saying that the US authorities will not unleash confrontation with major oil countries. Indeed, Washington is interested in developing benign relations with OPEC and other oil exporters outside the cartel.
Earlier on April 20, the House Judiciary Committee approved the anti-trust bill called NOPEC. The bill entitles Washington to bring anti-monopoly lawsuits against OPEC members and other large oil exporting countries to US courts. This initiative will have to win the most votes in the US Congress. Eventually, the bill will be signed into law by President Joe Biden.
Interestingly, over the last 20 years, the US has been eager to enact legislation which would enable the White House to put pressure on OPEC and independent oil exporters. However, all efforts made earlier were in vain.
Experts warn there is the other side of the coin. In other words, such legislation might hurt the US economy. A lot of American oil drilling companies benefit from the OPEC+ pact on oil production cuts. Regulating oil output rates, OPEC and its allies keep oil prices at appropriate levels. If the cartel goes out of existence, the global oil market will crash inevitably, experts fear.
Analysts from a Russian think tank believe that the new NOPEC bill will hardly be introduced against the current political background. Importantly, US oil companies take advantage of the OPEC+ deal that ensures growth of the benchmark oil prices. Experts point out that most American energy companies advocate for keeping the cartel.Obviously, the antitrust bill is viewed by market participants as a tool for influencing OPEC countries. Energy experts agree that the NOPEC bill is the sword of Damocles hanging over the global petroleum market. In case it actually comes into force, OPEC and its allies will run the risk of an investigation into anti-competitive practices launched by the US Justice Department.