US examining bill to sue OPEC over price fixing
The administration of US President Donald Trump is reportedly drafting a bill that would authorize legal action against the Organization of the Petroleum Exporting Countries (OPEC) for “artificially raising oil and gas prices”.
The bill would be prepared by the Department of Justice which would check whether OPEC’s internal as well as external pricing arrangements violate US anti-trust laws and eventually harmed American consumers, Bloomberg quoted an unnamed official as saying.
The Senate and House have both approved versions of a bill that would authorize the Justice Department to make a case against OPEC. Neither bill has been brought up for a vote, the report added.
In January 2017, OPEC heavyweight Saudi Arabia agreed with Russia to impose limits on each members’ oil production. The ongoing production quotas have contributed to higher oil and gas prices that have been passed on to and hurt American consumers, Bloomberg quoted the official as saying. The OPEC partnership and business strategy would likely violate US antitrust laws if the cartel was under US authority.
OPEC has struggled to police the self-imposed quotas and member countries have consistently produced past goals. A strong US oil and gas industry has also taken advantage of the OPEC cutbacks by filling the gap in the international market left by OPEC’s lower production, Bloomberg added.
President Donald Trump has been critical of OPEC’s arrangement in past months, but Trump has recently taken a more favorable tact with the cartel since it began bumping up production.
Crude oil prices recently fell more than $20 a barrel from a four-year high of roughly $86 a barrel in October.
Trump’s hostile rhetoric toward OPEC had repeatedly drawn criticisms from Iran. Bijan Namdar Zanganeh, the Iranian petroleum minister, recently dismissed US president’s pressures on the Organization to increase production, stressing that producers had no spare capacity left to pump more.
“Trump thinks he can bring down oil prices with hooliganism,” IRNA news agency quoted him as telling an oil and energy conference in Tehran in mid-October.
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