05 July 2007

From OPEC to NOPEC

The US of A is trying to apply anti-monopoly legislation to the Organization of the Petroleum Exporting Countries, in the hope that this will keep the oil price down. Now, why didn't anyone think of that before?

In a little-heralded move, the US House and Senate have both passed the so-called “NOPEC” bill (“No Oil Producing and Exporting Cartels Act”), which would allow the US Justice Dept to sue OPEC for anti-trust violations. The US Congress stood up to make the statement that Americans have had enough of having their hard-earned dollars pick-pocketed by OPEC’s cartel, which would be blatantly illegal if US-based companies were to conspire to restrict supply and raise prices.

The Bush Administration promised a veto of NOPEC with the rationale that the US does not want to invite retaliation with an oil embargo. More to the point, the Bush Administration can’t afford to cut off money to OPEC countries such as Saudi Arabia since the Saudi Arabian government is needed as a bulwark against Islamic extremism in the Middle East. Yet, both the House and Senate approved the measure by overwhelming, veto-proof margins, which means that Congress could indeed pass the bill into law, regardless of the President’s veto, if they are serious. The NOPEC bill specifically tries to remove the sovereign immunity protection that saved OPEC from an antitrust lawsuit in the 1970s.
(from Commodity Research Bureau Futures Market Service)