Is The U.S. Preparing To Punish OPEC?

The U.S. House of Representatives Committee on the Judiciary is reportedly preparing a bill to pressure the OPEC oil producers’ group to punish OPEC for the recent positive developments out of the Middle East.

In early May, the U.S. House of Representatives Committee on the Judiciary was reportedly considering a bill to pressure the  OPEC oil producers’ group to stop making output cuts by revoking the sovereign immunity that has protected OPEC+ members and their national oil companies from lawsuits over price collusion. (The committee previously passed the bill in 2018, 2019 and 2021.)

The OPEC Basket Price has hovered in the mid $70s, not historically high, though U.S. politicians like to talk down the price of gasoline before the summer driving season begins. (Saudi Arabia needs a price of $80.90 USD to balance its budget, and fund the diversification of its economy.)

Gasoline prices are higher than during the Trump administration, but the Gallup polling organization reported in April 2023, “Americans show significantly less concern about the U.S. energy situation now than they did a year ago.”

If American consumers aren’t up in arms over gasoline prices, and the recent OPEC production cuts have failed to stop the slump in crude oil prices, why might OPEC be a target now?

One reason may be the good news out of the Middle East: a rapprochement between Iran and Saudi Arabia (with Chinese mediation); Egypt and Iran starting to normalize ties (with mediation by Iraq); Syria rejoining the Arab league; the United Arab Emirates and Iran in talks to promote ties, and the possibility for energy cooperation between Iraq and Iran.  The bill may be retaliation against the Arab OPEC countries, and a warning to others, for normalizing ties with Iran and Syria, under the color of protecting U.S. consumers. It also avoids a discussion about the Biden administration policy of limiting oil and natural gas production, though lately the administration has approved limited drilling in federal lands.

According to investigative journalist Lee Fang, Google, Meta, and Amazon have been hiring low-paid foreign workers following layoffs in the United States.

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