U.S. Anti-OPEC Efforts Fading as Cartel’s Influence Seen Waning
U.S. efforts to rein in OPEC’s influence over global oil markets are losing momentum as the Trump administration takes a wait-and-see approach to energy prices.
While supporters of a bill that would open OPEC to possible U.S. antitrust action thought they’d found a cheerleader in Donald Trump, the current view within the White House is that OPEC’s clout is already waning and there’s no pressing need for action, according to an official who spoke on condition of anonymity. Unless there’s a sudden and protracted spike in prices, that isn’t likely to change.
Without the White House’s endorsement, the so-called NOPEC bill faces stiff headwinds on Capitol Hill.
“If there’s a fear that the administration is not going to support it, then that does act as a deterrent for it to move forward,” said Seth Bloom, a former general counsel of the Senate Antitrust Subcommittee who helped to draft the first NOPEC bill 19 years ago.
The White House’s position on OPEC may have evolved. Energy Secretary Dan Brouillette recently downplayed the cartel’s power, saying in an interview that the group “doesn’t have quite the same influence on the world pricing that it used to have.” Trump, who has often criticized the cartel for its influence over the oil market, declared this month that the U.S. no longer needs supplies from the region due to the shale boom. While his statement may be a stretch, it’s true that oil markets have largely shrugged off recent flare-ups in the Middle East, in part due to abundant supply.
Even U.S. gasoline prices hovering at the highest seasonal level in five years haven’t sparked a NOPEC revival.
A White House spokesperson didn’t immediately respond to a request for comment.
The latest versions of the bipartisan bill — which would amend the Sherman Antitrust Act of 1890 to allow the Justice Department to sue the cartel– have made limited progress since being introduced almost a year ago. Senator Chuck Grassley, a Republican from Iowa who introduced the Senate version of the bill, speculated that the State Department could be an obstacle. “It’s kind of a case of where, I guess, the courtesies of diplomacy would say that we shouldn’t interfere in the business of another state,” he said. “I don’t buy that argument but I think that’s kind of what’s behind it.”
Senator Lindsey Graham, chairman of the Judiciary Committee that would be the bill’s first step toward being passed, said last week that he had not even looked at it yet.
Still, the bill could get resuscitated later in the year if gasoline prices keep rising in the approach to the November election.
“In a future scenario where spiking oil prices are impacting consumers, the bill could resurface in a moment’s notice,” said Rapidan Energy Group’s Leslie Hayward.