London — US lawmakers' efforts to revive antitrust legislation targeting OPEC will add a wrinkle to the April 28 meeting between the oil bloc, Russia and other allies, but officials within the group say they are not worried about the prospects of American interference.
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The Saudi-Russia-led OPEC+ alliance is set to convene to firm up production plans for the coming months, having agreed earlier in the month to relax quotas by a collective 1 million b/d through July to meet growing oil demand.
Rising retail gasoline prices, however, have already drawn attention in the US Congress, where so-called NOPEC bills have been repeatedly introduced over the last two decades. The latest iteration was advanced by the US House of Representatives' Judiciary Committee on April 20, the first of several hurdles it would need to surmount before becoming law.
OPEC+ officials said they see no reason to be alarmed, and the group's production is set to rise anyway.
"This law is already a hundred years old," Russian Deputy Prime Minister Alexander Novak told reporters. "I read the news that the judicial committee in the Congress made such a decision, but the law itself has not yet been passed. It has been under discussion for many years."
If passed, the legislation would allow the US Justice Department to sue countries accused of colluding to limit production, fix prices or restrain trade of oil, natural gas and petroleum products.
The bill was last in the spotlight in 2018 and 2019 when then-President Donald Trump was in office. On several occasions, Trump heavily criticized Saudi Arabia, OPEC's de facto leader and a key US ally, for the bloc's implementation of production cuts aimed at propping up the market, wielding NOPEC legislation as leverage.
Trump's activism gave oil ministers considerable heartburn, and OPEC quietly retained lobbyists in Washington to counter the bill, while Saudi officials engaged in direct talks with US counterparts on energy production.
Current US President Joseph Biden is largely seen having a more hands-off approach to OPEC. He served as vice president under Trump's predecessor, Barack Obama, who had threatened to use his veto power if the bill passed Congress.
"If it could not happen under Trump, it will not happen now," one OPEC delegate told S&P Global Platts under condition of anonymity.
However, the Biden administration has not completely ignored the producer bloc. US energy secretary Jennifer Granholm talked via phone with Saudi energy minister Prince Abdulaziz bin Salman just before the last OPEC+ meeting on April 1. The official readout of the call said the two discussed largely green energy, and Prince Abdulaziz told reporters that oil prices were never brought up.
The US is not the only consuming country to pressure OPEC and its allies over its production cuts. India, a major buyer of Middle East crude, has repeatedly sparred with Saudi Arabia over prices and repeatedly called for the cuts to be eased – a move the OPEC+ coalition has resisted until now.
The 23-country alliance has been reining in about 8 million b/d of production – roughly 8% of pre-pandemic demand – over the past few months, but starting in May, its output is scheduled to rise by a collective 350,000 b/d, followed by another 350,000 b/d increase in June and a 441,000 b/d rise in July.
Saudi Arabia, which has been holding its output an extra 1 million b/d below its quota, will also unwind its extra cut by 250,000 b/d in May, 350,000 b/d in June and 400,000 b/d in July.
The group's April 28 meeting is expected to reaffirm those plans, banking on the market's ability to absorb the additional crude as the global economy continues to recover from the pandemic. Dated Brent prices have largely settled in the mid-$60s/b in recent weeks, having surged 40% since October.
OPEC+ sources said given the stability, the meeting could be changed from a full ministerial gathering to just a convening of the nine-country monitoring committee, co-chaired by Saudi Arabia and Russia. However, that call has not yet been made, the sources added.
"We have scheduled a meeting at the end of April in order to once again monitor and assess the current situation [and] forecasts," Novak said. "Last time we met a month ago, we discussed our plan of action for three months. Therefore, if nothing extraordinary happens, our task is to confirm these plans and make new ones [if needed]."