U.S. Congress wants OPEC to be its propertyStaff Writer | June 21, 2018
A legislation being debated in Congress could put pressure on OPEC if it is signed into law by President Donald Trump who has long been critical of the cartel's practices.
Oil exploration OPEC had agreed to keep its oil production unchanged
In November 2014, led by then-Saudi Oil Minister Ali Al-Naimi, the Kingdom had refused to listen to other cartel countries' appeal to cut output in order to rid oversupply in the global market to boost lower oil prices.
Spearheaded by Saudi Arabia, OPEC had agreed to keep its oil production unchanged - a strategy that is seen by many analysts as an attempt to keep global oil supply high, lower crude prices even further and kick high-cost U.S. shale oil producers out of the market.
With oil prices diving below $30 per barrel in January 2016 to their lowest level in 13 years, OPEC's strategy was disastrous for the American oil industry.
"Around $250 billion investment in U.S. oil market disappeared, 250,000 jobs were lost, more than 300 oil companies in the U.S. declared for bankruptcy. And, countless billions of dollars were lost in tax revenue," Ed Hirs, an energy economist at the University of Houston, told Anadolu Agency.
"It [the Act] should have been brought up in 2014, or certainly in 2015, when OPEC set out and launched an attack against the U.S. I think, the president and the Congress would have responded very differently," he added.
The NOPEC Act was first introduced in 2000 to allow the cartel to be sued by the U.S. in violation of anti-trust laws. It has been introduced around 16 times since then, but former presidents George W. Bush and Barack Obama were openly against it.
"In the energy industry our players get hurt, because some actions by OPEC - flooding the market with oil at a time where normally they wouldn't have in the past - ended up prices going too low during the production war, knocking out a lot of investment that we probably are going to need in future," senior market analyst Phil Flynn from Chicago-based futures brokerage firm, Price Futures Group, told Anadolu Agency.
"I would argue that OPEC conspired to knock a lot of energy producers out of business so that they could maintain the market share. And I think they succeeded in doing that in a large degree," he said.
NOPEC was sent for discussion to the House floor last week by the House Judiciary Committee. And, this time, if it passes, it could be signed into law by Trump.
The president has recently upped his criticism against OPEC. "Oil prices are too high, OPEC is at it again. Not good!", Trump wrote last week. And in April: "Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!" ■