Lawmakers from Washington are seeking to expand the U.S.’ power to deal with OPEC over allegedly conspiring to raise global oil prices. However, the effort is met stiff resistance and contrasts sharply to President Biden’s proposal to request the leader of the cartel this week to boost oil production.
The antitrust legislation known as the No Oil Producing and Exporting Cartels Act (or NOPEC) would give the Justice Department the ability to sue OPEC and other countries doing business with it.
The bill was kicked around Capitol Hill since decades, but gained new interest before Mr. Biden’s trip to the Middle East this week. This includes a stop at Saudi Arabia. He plans to get help reducing high gasoline prices in America .
Mr. Biden also will meet with Saudi Crown Prince Mohammed bin Salman. He is suspected to have ordered the murder of Jamaal Khashoggi (Washington Post journalist), which has drawn criticism. The president had previously pledged to make Saudis pariahs due the Khashoggi assassination.
Sen. Ben Cardin from Maryland, a Democrat, has championed NOPEC ever since Obama’s era. He said that administrations don’t want to poke fun at OPEC.
” They feel they can manage it through international channels, and Congress can’t push them forward,” he stated. “At end of the day they kind of like what we’re doing, but that’s not the case .”
Although the United States has less reliance upon OPEC to import oil since the late 2000s the cartel still accounted 13% for crude oil imports in the last year. According to Energy Information Administration, that’s almost 1,000,000 barrels per day.
Saudi Arabia accounted for approximately 6% of all oil imports to the United States last year.
In April, which was the latest month, the U.S. imported 37 millions of barrels oil from OPEC nations.
The organization was founded in 1960, by Venezuela, Iran, Kuwait, Saudi Arabia, Saudi Arabia, and Kuwait. The organization now has more than 12 countries. Saudi Arabia insists that OPEC does not hold back production to reduce global supply, but is increasing its output as quickly as possible.
The rapid rise in gas prices this year has prompted legislators to shine another spotlight on NOPEC. However, the legislation still faces headwinds from Congress’ Democratic leaders who aren’t willing to challenge Mr. Biden.
The Senate Judiciary Committee passed the bill with an overwhelming vote in May. It received a 17-4 and companion versions in both the House and Senate.
” If the administration insists that we rely on foreign oil, then at most, we should hold foreign producers responsible for price fixing which is harmful,” Senator Chuck Grassley of Iowa, a Republican, stated earlier in this year.
The White House has previously expressed concern about the “potential consequences and unintended consequence” of the legislation, particularly in light of the current global oil crisis caused by Russia’s War in Ukraine.
Opponents worry that NOPEC will lead to retaliation by OPEC, drive prices higher, and limit diplomatic options for the administration. Some fear it will impede domestic energy production and create regulatory uncertainty.
The current push for NOPEC is at least the 9th time that legislators have attempted to pass legislation or versions similar. This issue is often brought to the forefront when gasoline and oil prices rise.
” It’s complicated and could have unintended consequences, where the risks may actually outweigh the chances of realizing the intended outcomes,” stated Reed Blakemore who is acting director at the Global Energy Center of the Atlantic Council. This think tank specializes in international affairs. It doesn’t open the floodgates to oil. It introduces too much regulatory uncertainty and raises prices .”
Pump prices have fallen over the last month but $4.01 remains the average national price. AAA reports 63 per gallon of regular gasoline on Wednesday.
It’s unlikely that Democratic leaders in Capitol Hill would like to have a fight with Mr. Biden, and possibly force him into using his veto power against the Democratic-run Congress. Despite leaders like Charles E. Schumer (New York Democrat), having supported NOPEC in the past, this intraparty dynamic discredits its advancement.
During this time, President Biden defends his Saudi visit as well as his plans to request more oil from a foreign enemy.
“The United States considers human rights to be a strategic national interest. Energy security is important, as is stopping terrorism and seeking peace in a country like Yemen,” Jake Sullivan, White House National Security Advisor, told reporters. He said that he would do everything in his power to lower gasoline prices ].”
, at both home and abroad.