Some lawmakers push back on the oil cartel OPEC with a bill they called NOPEC
LEILA FADEL, HOST:
The White House and lawmakers on both sides of the aisle are threatening to punish OPEC, plus member nations, over their decision to dramatically cut oil production. Lawmakers say a drop in oil supply would again drive gas prices up in the U.S. To put pressure on Saudi Arabia in particular, members of Congress, including Senate Majority Leader Chuck Schumer and Republican Senator Chuck Grassley, want to revive legislation called NOPEC, the No Oil Producing and Exporting Cartels Act. If the bill became law, it would allow the Justice Department to sue Saudi Arabia and other OPEC nations for illegal price fixing. For more, we're joined by Ellen Wald. She's a senior fellow at the Atlantic Council and author of the book "Saudi, Inc.: The Arabian Kingdom's Pursuit Of Profit And Power." Good morning. Thanks for being on the program.
ELLEN WALD: Good morning. Thanks for having me.
FADEL: So let's say this were to pass, what would the ability to sue OPEC nations mean for the U.S. and U.S. consumers?
WALD: Essentially, it would mean that the attorney general could sue countries that produce oil and are members of OPEC. So they could be sued for price fixing, which is technically illegal in the United States. The issue that we're talking about for American consumers is that these countries could retaliate against American interests, first of all, but it could also hurt the overall oil supply. We could see a reduction in global oil supply as a result. We could have countries not wanting to sell to the U.S., which is an important part of our global oil supply. We could also see these countries retaliate against U.S. interests in their countries, including nationalizing American oil interests in those countries.
FADEL: So you described a lot of different ways that there could be retaliation here, but there's a lot of support and anger over what's happened with oil supply and an assumption that Saudi Arabia, a U.S. ally, is backing Russia with this move. Is it possible that Saudi is just looking at their own bottom line, that they needed to prop up the price of oil for their own economic reasons?
WALD: I think Saudi Arabia sees what's going on in the global oil market and is very concerned about the possibility of a global recession and that that could cause a major drop in oil prices like we saw in 2008. They're looking to head this off. But when you look at the actual amount of barrels that are going to come off the market from this cut, we're talking about a lot less than 2 million barrels a day because OPEC isn't producing up to its quotas. So this is a cut of the quotas that OPEC has, but most countries aren't even producing that much. So we're talking maybe 300 million barrels a day to 600 million - I mean, I'm sorry - 600,000 barrels a day, which is a lot less than they said.
FADEL: Now, you mentioned that legislation like NOPEC might risk some retaliation. How would it affect the U.S.-Saudi relationship?
WALD: I think it would become very difficult. The issue is if this lawsuit actually goes through the legal system, what kind of things could we see happen down the line? So would the United States try to seize Saudi asset in the United States in order to collect? And that could lead to some very difficult issues between the United States and Saudi Arabia, particularly for Americans in Saudi Arabia, Americans doing business in Saudi Arabia but also Saudis who do business in the U.S. And that includes the Aramco refinery in the United States, which is the largest refinery in the U.S., the Motiva refinery in Texas.
FADEL: And bottom line, would legislation like NOPEC help at the gas pump, which is what a lot of Americans care about?
WALD: I don't think it would help at the gas pump at all. We're seeing a lot of issues at the gas pump that are maybe somewhat related to OPEC but are not entirely related to OPEC. We've got a lot of issues in the United States. We don't have as large of refining capacity as we had. And if we start to sue these other countries that have sovereign immunity, then we're probably actually going to see gas prices go up because these countries are going to be reluctant to do business with the United States out of the fear that their assets could just be taken from them as a result of these lawsuits.
FADEL: Ellen Wald is a senior fellow at the Atlantic Council. Thanks so much for your time this morning.
WALD: Thank you.
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