The Organization of the Petroleum Exporting Countries (OPEC) and its partners are now exposed to lawsuits for collusion in boosting crude oil prices in line with a bill that the US Senate committee passed on Thursday.
Sponsored by senators, including Republican Chuck Grassley and Democrat Amy Klobuchar, the No Oil Producing or Exporting Cartels (NOPEC) bill passed the Senate Judiciary Committee by 17-4.
It now needs to pass the full Senate and House and be signed by President Biden to become law.
NOPEC would change US antitrust law if passed, giving the US attorney general the power to sue in federal court OPEC or its members since it revokes the sovereign immunity that has long protected the organization and its national oil companies from lawsuits.
It also includes other producers like Russia, which works in a wider group known as OPEC+ to withhold output.
Some analysts warn that implementing NOPEC could have potentially dangerous unintended consequences although it’s intended to protect US consumers and businesses from engineered spikes in the gasoline cost.
The US gasoline prices, which briefly hit a record above $4.30 a gallon this spring, increased lawmakers’ concerns about rising inflation driven in part by those prices.
Noting that the White House is still studying the bill, spokesperson Jen Psaki noted the administration’s concerns about the legislation’s potential implications and unintended consequences, particularly amid the Ukraine crisis.
The requests made by the United States and other consumers for boosting oil production beyond gradual amounts have been rebuffed by both OPEC producers and Saudi Arabia even as oil consumption recovers from the COVID pandemic and Russian supply falls.
After it cut production when oil prices crashed to historic lows when the pandemic slashed oil demand, OPEC+ agreed on Thursday to stick to the existing plans to reverse the curbs with modest increases for another month.
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