The NOPEC bill, which was recently reintroduced in Congress by a group of legislators, and price caps on oil will only serve to increase instability and uncertainty in oil markets rather than solve any problems, Saudi Energy Minister Abdulaziz bin Salman told Energy Intelligence.
“The Nopec bill does not recognize the importance of holding spare capacity and the consequences of not holding spare capacity on market stability,” bin Salman said, adding that “Nopec would also undermine investments in oil capacity and will cause global supply to fall severely short of future demand.”
A bipartisan group of U.S. senators earlier this month reintroduced the so-called No Oil Producing and Exporting Cartels bill in a bid to force OPEC+ to lift its self-imposed production cuts.
If successful, a NOPEC law would make it possible to sue OPEC national oil companies for monopolistic practices. According to bin Salman, the impact of such legislation coming into effect would be felt across the market, by consumers and producers alike, and it will not be a positive impact.
“The same holds for price caps, whether imposed on a country or a group of countries, on oil or any other commodity,” the Saudi energy minister said. “This will lead to individual or collective counter-responses with intolerable consequences in the form of massive volatility and instability.”
He then went on to say that if someone imposed price caps on Saudi oil, the Kingdom would shrink production and stop exporting oil to the countries that support the cap, which is exactly the same as Russia is doing with the G7/EU price cap.
