U.S. to sue OPEC as worries over $100pb oil prices mount

The United States (U.S.) is planning to secure a legislative power to sue member countries of the Organisation of Petroleum Exporting Countries (OPEC) as its worries over possible $100 per barrel for crude oil heightened.

The plan is to work on a bill called No Oil Producing and Exporting Cartels Act (NOPEC) by the U.S. Senate to revoke the sovereign immunity that had been protecting OPEC members, including Africa’s largest exporter of crude, Nigeria, from U.S. legal action.

It would be recalled that Brent crude, against which Nigeria’s oil is priced, hit its highest level of $84 per barrel since November 2014 on Monday, a development which displeased the U.S government.

In spite of this, ANZ bank had said that “the market is eyeing oil prices at 100 dollars per barrel.’’

The surge was occasioned by supply concerns in the international market ahead of U.S. sanctions on Iran’s oil sector expected to take effect from next month.

The recent oil rally is rekindling United States’ proposals, which had long been abandoned, to sue OPEC nations, even though they were once considered unlikely to becoming law, according to Reuters.

In 2007, a version of NOPEC was passed by both houses of Congress, but it was shelved after President George W. Bush said he would veto the legislation.

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It was gathered that a U.S. Senate subcommittee was slated to hold today to hear the bill.

“Past U.S. leaders have opposed the NOPEC bill, but the possibility of its success may have increased due to President Donald Trump’s frequent criticism of OPEC, and as some predict that Brent crude, the international benchmark, could reach $100 a barrel before long,” the news agency reported.

Although business groups and oil companies oppose the bill, citing the possibility of retaliation from other countries, but the Senior Energy Policy Analyst at Hedgeye Potomac Research, Joe McMonigle, said “OPEC is a pet peeve for him” and “everybody thinks he could easily support NOPEC.”

Sources privy to the matter hinted that the Saudi Arabia is lobbying the U.S. government to prevent the passage of the bill.
According to McMonigle, today’s hearing before the Senate Subcommittee on Anti-trust, Competition Policy and Consumer Rights could give insight into the executive branch’s stance.

With increasing possibility of the passage of NOPEC bill, it appears the bill may not be passed this year as the U.S. House of Representatives is scheduled to be in session for only 16 days till the end of the year.

 

 

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