The NOPEC (No Oil Producing and Exporting Cartels) Act was passed by a Senate subcommittee on Thursday with a 17:4 vote. The measure is meant to safeguard American consumers and companies from artificially inflated gasoline and heating oil prices, but some analysts warn that enacting it might have unexpected effects. This bill is now passed after nearly two decades of unsuccessful efforts.
Top OPEC officials stated that the NOPEC legislation in the United States would authorize antitrust litigation against the producer alliance. This would aggravate market instability by driving away investment in the oil business.
Since Russia’s invasion of Ukraine in late February, the OPEC+ coalition has been under pressure from consuming nations for not aggressively producing more petroleum to tamp down increasing prices and growing inflation. Russia, which generally produces around 10% of the world’s oil, might see its crude output decline further by as much as 17% this year as a result of Western sanctions.
Saudi oil minister Prince Abdulaziz bin Salman stated that the OPEC and its partners are being unfairly blamed for the energy crisis when other commodities are also experiencing high prices. Suhail al-Mazrouei, the UAE’s energy minister, noted that while the oil market is balanced and properly supplied, a lack of investment will threaten future output.
The US Senate Judiciary Committee forwarded the NOPEC measure to the full Senate for consideration on May 5, citing voter dissatisfaction with high gasoline and diesel prices as a reason for its passage. The measure would then need to pass both the Senate and the House of Representatives, as well as the president’s signature, to become law. President Joe Biden, on the other hand, has not committed to signing the bill. The bill faces opposition from the US’ own oil producers. “This may definitely have a negative impact on US operations and investments in those nations across all sectors,” American Petroleum Institute President Mike Sommers said in a letter to US Senators Dick Durbin and Chuck Grassley last week.
