(Bloomberg) -- Legislation that would allow the US to sue OPEC nations is being considered as a possible response to the oil cartel’s production cut this week that benefited Russian President Vladimir Putin, said Senate Majority Leader Chuck Schumer on Thursday.
“What Saudi Arabia did to help Putin continue to wage his despicable, vicious war against Ukraine will long be remembered by Americans,” Schumer said in a statement. “We are looking at all the legislative tools to best deal with this appalling and deeply cynical action” including the bill known as NOPEC.
A person familiar with the matter told Bloomberg News that there are no plans to bring the measure to the floor, although that could change. The White House, which has left open the possibility of backing the bill, didn’t respond Thursday to a request for comment.
The No Oil Producing and Exporting Cartels Act, first introduced two decades ago, would allow the US government to sue members of the Organization of Petroleum Exporting Countries for manipulating the energy market, potentially seeking billions of dollars in reparations. Under the legislation, the Justice Department could bring lawsuits against cartel members for antitrust violations, a move analysts have said the mere prospects of which could spark a dramatic selloff in crude prices.
Following the production cut announcement on Wednesday by OPEC+ -- members of OPEC along with Russia and other countries -- the Biden administration suggested it might be willing to back the bill, which has broad support among both parties in Congress.
“The Biden administration will also consult with Congress on additional tools and authorities to reduce OPEC’s control over energy prices,” National Security Advisor Jake Sullivan and National Economic Council Director Brian Deese said in a statement Wednesday.
The NOPEC bill has been called a “nuclear option” that could have wide-ranging effects for not just energy markets, but the defense industry and geopolitics as well. And as recently as May, the White House said it had concerns about its “potential implications and unintended consequences.”
The consulting firm ClearView Energy Partners said in a research note Wednesday that “signs of administration intent to use new powers that NOPEC would confer -- a dramatic intervention -- could lead OPEC+ to reconsider and potentially abandon its ‘market balancing’ role, provoking a dramatic selloff and the exhaustion of global spare capacity.”
On Thursday, there was a bipartisan move to revive the legislation with Senate Judiciary Committee Chairman Dick Durbin, an Illinois Democrat and Republican Senator Chuck Grassley, calling for consideration of it when Congress returns after the November election.
“From unanswered questions about 9/11, the brutal murder of journalist Jamal Khashoggi, and the exporting of extremism, to dubious jailing of peaceful dissidents and conspiring with Vladimir Putin to punish the US with higher oil prices, the Saudi royal family has never been a trustworthy ally of our nation,” Durbin said. “It’s time for our foreign policy to imagine a world without this alliance with these royal backstabbers.”
Many of the hijackers who seized planes on Sept. 11, 2001, were Saudi. Khashoggi was killed at the Saudi consulate in Istanbul in 2018.
©2022 Bloomberg L.P.
BNN Bloomberg Picks
TD Bank pauses Canada Post loan program weeks after national expansion
Interest on some mortgages in 2022 up 250% from the previous year: RateHub.ca
Holiday shopping: Expert advice on finding deals and saving
Inflation relief measures should be well targeted and temporary, says Macklem
How stay-at-home spouses can build credit
Looking for tax-loss season bargains for 2023 and beyond: Berman