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US legislation NOPEC- To tackle high fuel prices

US legislation NOPEC- To tackle high fuel prices: Relevance for UPSC Exam

General Studies III- Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

US legislation NOPEC- To tackle high fuel prices_3.1

US legislation NOPEC- To tackle high fuel prices: Context

US legislation NOPEC which could open members of oil producing group OPEC+ to antitrust lawsuits has emerged as a possible tool to tackle high fuel prices.

What is US legislation NOPEC?

  • NOPEC stands for No Oil Producing and Exporting Cartels (NOPEC).
  • It is a bill to protect US consumers and businesses from engineered oil spikes.
  • But some analysts warn that implementing it could also have some dangerous unintended consequences.

US legislation NOPEC: Need

  • OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, agreed to steep production cuts, curbing supply in an already tight market.
  • After the decision, the US decided to reduce the group’s control over energy prices.

US legislation NOPEC: Key features

  • The bipartisan NOPEC bill would tweak US antitrust law to revoke the sovereign immunity that has protected OPEC+ members and their national oil companies from lawsuits.
  • If signed into law, the US attorney general would gain the option to sue the oil cartel or its members, such as Saudi Arabia, in federal court.
  • It is unclear exactly how a federal court could enforce judicial antitrust decisions against a foreign nation.

US legislation NOPEC: Historical Background

  • Previous versions of the NOPEC bill have failed amid resistance by oil industry groups, including the top US oil lobby groups.
  • Saudi Arabia has rebuffed repeated lobbying during visits by Biden officials not to cut production.
  • Instead, OPEC+ has agreed to cut output by the most since the start of the COVID-19 pandemic.

US legislation NOPEC: Implications

  • NOPEC more or less is a knee-jerk reaction from the US against oil hegemony of the OPEC+.
  • If passed into law, it could lead to unintended blowback.
  • In 2019, for example, Saudi Arabia threatened to sell its oil in currencies other than the dollar if Washington passed a version of the NOPEC bill.
  • There is a possibility that other countries could take similar action on the US for withholding agricultural output to support domestic farming, for example.


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