A US Senate committee passed a bill on Thursday that could expose Opec and partners to lawsuits for collusion on boosting crude oil prices.
The No Oil Producing or Exporting Cartels (Nopec) bill sponsored by senators, including Republican Chuck Grassley and Democrat Amy Klobuchar, passed 17-4 in the Senate Judiciary Committee.
Versions of the bill that takes aim at the Organisation of the Petroleum Exporting Countries, or Opec, have failed in Congress for more than two decades. But members of Congress are increasingly worried about rising inflation driven in part by prices of petrol, which briefly hit above $4.30 a gallon this spring — a record.
“I believe that free and competitive markets are better for consumers than markets controlled by a cartel of state-owned oil companies … competition is the very basis of our economic system” Ms Klobuchar said.
Nopec would change US antitrust law to revoke the sovereign immunity that has long protected Opec and its national oil companies from lawsuits.
The bill must pass the full Senate and House and be signed by President Joe Biden to become law.
If passed, the US attorney general would gain the ability to sue Opec or its members in federal court. Other producers such as Russia, which works with Opec in a wider group known as Opec+ to withhold output, could also be sued.
Many Opec producers have rebuffed requests by the US and other consuming countries to boost oil production beyond gradual amounts, even as oil consumption recovers from the Covid-19 pandemic and Russian supply falls after its invasion of Ukraine.
Opec+, which cut production when oil prices crashed to historic lows when the pandemic slashed oil demand, agreed on Thursday to stick to its existing plans to reverse the curbs with modest increases for another month.
Nopec is intended to protect US consumers and businesses from engineered spikes in the cost of petrol, but some analysts say that enacting it could also have some dangerous, unintended consequences.
In 2019, Saudi Arabia reportedly threatened to sell oil in currencies other than the dollar if Washington passed Nopec, a move that could undermine the dollar's status as the world's main reserve currency, reduce Washington's clout in global trade and weaken its ability to enforce sanctions on nation states.
