Speculations are rising that US President Donald Trump would endorse a new Congress bill that would authorize Washington to file antitrust lawsuits against oil producers over allegations of "price fixing".
Last week, the US Senate introduced a bill, the No Oil Producing and Exporting Cartels Act (NOPEC), which could expose the Organization of Petroleum Exporting Countries (OPEC) to antitrust lawsuits.
The bill would be meant to bring an end to efforts by the OPEC, Russia and other non-OPEC oil producers to stabilize the global crude market, according to a report by Russia’s Sputnik news agency.
To the same degree, concerns are already rising among oil producers that the bill would foil their efforts to stabilize prices as signs already indicate that US President Donald Trump already has a sympathetic ear to the Congress over approving NOPEC.
US Senator Chuck Grassley, a co-sponsor of the legislation, was quoted by media as saying that American consumers could suffer from arrangements between OPEC and non-OPEC producers over prices.
This, Grassley emphasized, would provided enough incentives to move to “cut OPEC's stranglehold on consumers”.
“Most recently, OPEC and its allies, including Russia, cut production by about 1.8 billion barrels per day. This move triggered an international price swing, lifting prices to more than $80 a barrel at the start of summer,” the Senator was quoted as saying by Sputnik.
“American consumers shouldn't be at the mercy of OPEC at the pump. That's why I'm working to cut OPEC's stranglehold on consumers.”
A version of the bill was introduced by lawmakers in the House of Representatives in May 2018 after oil prices reached a three-year high. The initiative had its second wind in mid-July.
The legislation has been repeatedly reintroduced since 2000 by the both chambers of the US Congress. However, then-presidents George W. Bush and Barack Obama did not endorse the initiative, warning that they would use their veto power to prevent it.
However, according to Senator Grassley, this time the bipartisan NOPEC is likely to "get the president's attention and send a signal that the United States will not tolerate OPEC's flagrant antitrust violations."
“It’s long past time to put an end to illegal price fixing by OPEC,” Grassley was quoted as saying in a recent statement. We are “committed to reducing our reliance on foreign oil, especially when it’s artificially and illegally priced. Our bill shows the OPEC members we will not tolerate their flagrant antitrust violations.”
It appears that OPEC is taking the possibility of the adoption of the NOPEC bill seriously. According to Bloomberg, the cartel's legal team discussed the legislation with law firms including White & Case LLP in Vienna last week, seeking to work out a strategy for coping with NOPEC.
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