Bloomberg article

The world can take away Saudi Arabia and Russia's power to push up crude prices by forming its own cartel to encourage renewable fuels and influence energy markets.
Saudi Arabia’s Crown Prince Mohammed bin Salman's complicity with Russian President Vladimir Putin in violating a Saudi-US agreement to lower oil prices underscores a simple reality: OPEC+ must go.
The oil cartel's purpose was monopoly pricing. Its side effect has been catastrophic volatility. Its current mission appears to be to knee-cap the world’s last chance to avoid climate catastrophe.


The idea that the U.S. has no tool except a begging bowl to influence global oil prices is absurd. OPEC+ is cutting production at a time when the world is working to reduce its dependency on petroleum products. The rising tide of electric cars and trucks will dramatically reduce demand for crude in the decades to come. A successful challenge to the OPEC+ monopoly would leave plenty of oil, much of it U.S. shale, to meet the world’s needs.

A bill now pending in Congress known as NOPEC -- the No Oil Producing and Exporting Cartels Act -- would override sovereign immunity protections and subject Saudi Arabia and its allies to U.S. antitrust laws. If the U.S. and Europe initiated antitrust enforcement -- such as import duties, limitations on access to public financial markets, fines and sanctions -- against Saudi Aramco, Russia’s Rosneft Oil Co. and similar government-controlled oil, the cartel’s ability to engage in price gouging would crumble, and the price of oil with it.

Such potential legal action enjoys genuine bipartisan support in the U.S. Congress. The OPEC+ alliance includes a wide variety of members -- Nigeria and Iraq as well as the Saudis --- and, like any cartel, it’s only as strong as its weakest link. If the U.S. government had the legal tools, OPEC+ might protest but wouldn’t be able to retaliate effectively.

To replace OPEC+, the U.S. and European Union should organize a broad anti-cartel of responsible oil producers and consumers. Such an Organization for Clean and Affordable Transportation -- OCAT -- would manage oil prices within an affordable but adequately profitable range -- probably starting between $70 and $90 per barrel, with the range being lowered as crude demand falls. It should also require all oil exporters to reduce pollution and carbon risk. Such an idea was proposed by China back in 2012 but ignored. We should dust it off.

In addition to antitrust sanctions, OCAT’s members would need to deploy two primary tools. First, they would develop a much larger network of Strategic Petroleum Reserves to manage oil prices. By buying oil at $70 during downturns and selling when it tops $90, the reserve would be less costly than today’s wildly volatile oil market and might even make a profit. Like any consumer’s alliance, OCAT would need to respond to changes in the underlying market, raising and lowering its price band as available -- not cartel manipulated -- supply warranted. But it would be oil consumers, not just producers, making these decisions. OCAT, to be successful, would need to represent responsible producers, including those current members of OPEC+ who were willing to work for a stable, market-driven oil price.

Demand for oil will not vanish overnight, but by ensuring a competitive supply of petroleum at buffered prices, plus continued strong investment in electrified transport, OCAT could accelerate the end of the age of oil while maintaining a stable energy economy during the transition. This could happen fast -- faster than any other fix on offer to assure both reasonable oil prices and shrinking global consumption. If the countries that have to import petroleum products -- the vast majority of the world -- organize themselves around the principal of fair and stable oil prices, their common interests would enable them to overcome resistance from oil exporters.

I agree with you

Of course, you are in agreement with the West.
You will even try to educate me on how it's good for us all

joyandfaith:
I agree with you