We The People Politics

A Law Suit on OPEC: Finally Some Responses

It appears that the great American past-time activity of a law suit is becoming even more popular with the passing of a recent House bill. This bill will make the members of the OPEC fall under the same antitrust laws that American companies have to follow. In essence, the House has finally responded to the non-stop growth in prices for gas and the negative responses that OPEC nations have given. It is said that this will force OPEC to follow a more supply and demand style. Will it work, though?

The House thinks yes. Democratic Rep. Steve Kagen of Wisconsin said, “This bill guarantees that oil prices will reflect supply and demand economic rules, instead of wildly speculative and perhaps illegal activities.” I can agree that OPEC has been a bit random with their numbers and letting oil reach the heights that they have is anything but ‘typical economics.’ However…What do others think about the whole suit?

The White House thinks it is really a bad idea. They feel that if we sue OPEC, they will retaliate and cut back on the amount of oil that they ship to US refineries. This would just raise the price of the gasoline we put in our cars by a lot more. Can America afford that? Can America really afford such a massive increase in oil? Oil Crisis of ’73 anyone?

I think we’ll be fine. We are led to believe that we should fear OPEC because they can stop giving oil to us at any time. According to this site, America consumes 20 million barrels of gasoline a day. Twenty million…Now, let’s just say for argument’s sake that every last one of those barrels came from OPEC. As I am writing this article, crude oil rose above $130 a barrel. So, let’s do the math. Twenty million barrels times $130 a barrel equals…$2,600,000,000. If you can’t count numbers, that’s two billion six hundred million dollars a day in revenue.

I’m not saying that the figure I just provided is profit. I’m saying that if EVERY barrel came from the OPEC nations and suddenly they stopped shipping oil to us, they’d be missing out on $2,600,000,000 a day in revenue. In a year? Just multiply by 365 and you get the figure.

Because of the amount of money that we invest in their nations, they would be fools to say “no, we’re not giving you oil.” America, while we may be war mongers, is also a very smart nation with some very smart scientists. There is nothing stopping us from saying, “Fine, Mr. OPEC, don’t give us oil, we’ll focus more money on something else.” OPEC knows this. They know that the customer is in control and we can only be stretched so far.

So, do I agree with the bill?

Yes. I think that if OPEC is going to randomly price the oil to maximize their profits despite the fact supply and demand states that it should be priced lower, then I think OPEC should be sued and I think that we should force a lower price. Should we fear retaliation? Not in our oil. Maybe in other things, but not in our oil. They need us just as much as we need them. Without us, they don’t have a huge chunk of business and the same can be said about them. We lose too. Everyone loses if they stop selling us oil. However, I have full confidence that America will recover far faster. Just look how fast we’ve grown since our Independence.