NOPEC (2007-08) was designed to allow the international oil cartel, OPEC, and its national oil companies to be sued under U.S. antitrust law for anti-competitive attempts to limit the world's supply of petroleum and the consequent impact on oil prices. This bill to hobble OPEC is now advancing in US Congress. In response to potential NOPEC Act, Saudi has threatened to stop petrodollar transactions.
Passing this bill will help US sue the OPEC nations for collusion and controlling the oil prices, hampering the existence of cartel. De-cartelisation may induce the individual countries to increase their production at maximum capacity, potentially resulting in fall in oil prices & increased price volatility. US being one of major suppliers (US – 11.2 mbpd, Russia – 11.4 mbpd, OPEC – 10.3 mbpd), slump in oil will also impact US producers & economy, thereon.
Coupled with this, giving up of petrodollars by OPEC will impact dollar’s global dominance & demand adversely. US Dollar may witness depreciation, impacting their enlarged trade deficit. With the recent fears of over-valued US markets and potential upcoming recession, increase in peaked interest rates by US, will increase the chances of slowdown. Substitution of petrodollars with possible currency like Chinese Yuan and US’ trade tensions with other countries may aggravate the situation. These factors will rattle the US economy & may have rippling effect across the globe.
Considering these possible severe consequences, it is less likely that NOPEC Act will be passed by mindful Congress
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