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This little-known bill could cause absolute economic chaos. Are you ready for it?

by , 24 May 2022
This little-known bill could cause absolute economic chaos. Are you ready for it?
Over the last few years, the world has changed significantly. Things that were once considered virtual impossibilities are now reality. Of course, I'm talking about the Global Pandemic, but also the seemly wild decisions being taken by global governments. If I'd told you, even a few years ago, that Russia would mount a full-scale attack on the Ukraine, or that Britain would leave the EU, or you might be locked in your house for weeks at a time, you'd probably have thought I was crazy.

But as global decision making becomes more erratic, the scope of scenarios you need to consider must expand. In such an environment, movements that may have seemed on the fringe could easily become mainstream reality.
You’ve never seen anything like this…

One member even wrote to tell us,  "he made R92,000 in one day off one of our trades”!
Read more.

One such initiative is the NOPEC law

The NOPEC bill or the No Oil Producing and Exporting Cartels bill, has been around for decades. It’s aimed, as the name suggests, at OPEC which is the Organisation of Petroleum Exporting Countries. OPEC is a collection of member countries that act together to control the oil market. It accounts for about 40% of global oil production and about 80% of proven reserves.

OPEC is a classic cartel. This means it aims to restrict production to increase the price of its product. If we were talking about companies, rather than countries, OPEC members would almost certainly be subject to legal action due to criminal antitrust behaviour. However, as a collection of countries they have been immune to such action.

You might also have heard of OPEC+ (rather than just OPEC). In recent years, several non-OPEC oil producing countries, such as Russia, Mexico and Sudan, have also decided to work together in conjunction with the formal OPEC members. This has only increased their control over oil markets.

For decades US lawmakers (and only the US really counts here) have put forward the idea that OPEC and OPEC+ should face some sort of action for antitrust behaviour. And, while the NOPEC bill has been around for a while in various forms, it’s never managed to gain traction. Successive US presidents, as well as strong lobby groups, have managed to block it. However, this appears to be changing. The US Senate Judiciary Committee recently passed a new version of the NOPEC bill. Though the bill still needs to get through Congress, the full Senate, and be signed by the President, it does represent a significant step forward. It’s the first time such a bill has made it past the committee. And it wasn’t even close. The bill passed by 17 votes to four.

In a normal world, I'd expect almost no chance for the Bill to go much further.
But we live in strange times. The US/OPEC relationship has been strained for some time, but with Americans now paying record high petrol prices, there is very little political goodwill for tolerating cartel pricing.

That said, OPEC isn’t taking this development lightly. They’ve already highlighted that should NOPEC pass, oil prices could rise 100% to even 200% from here as they cut production aggressively. I don’t need to tell you that $300 per barrel oil would almost certainly cause a global recession.

Tags: nopec, oil,

This little-known bill could cause absolute economic chaos. Are you ready for it?
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