Tuesday, May 20, 2008

Should We Sue OPEC Over Oil Prices?

I never before thought to ask the question, but apparently it is possible for us to sue OPEC over the current state of oil prices. In fact, the House just passed a bill today that would allow Justice Department to sue OPEC members for limiting oil supplies and working to set crude prices, according to Reuters. Of course, the White House has all but guaranteed a veto of this bill, so whether or not it actually comes to pass is another story, but it is an interesting thought to ponder.

First off, I’m not sure just how successful this measure would be anyway. Even if we could legally sue these countries, according to our laws at least, what would make them actually honor these claims? I have a feeling that international courts might not feel so bad for the poor U.S. considering we still enjoy some of the lowest oil costs in the world. Just go to Europe or New Zealand and tell them your sob story about $4 a gallon gas, most likely they are going to laugh you out of the room and tell you they could only dream of gas being that cheap. If the international community were able to also take part in the suit, that might make things a little more amenable, but in reality how fair would that be?

These OPEC countries are simply trying to maximize revenues on their limited natural resource, what is so wrong with that? Countries in the Middle East, for example, have little driving their economies other than oil, so what happens to these countries when their oil supply is gone? Should the U.S., or any country for that matter, be able to tell another country that they want and need what they have, but wait a sec, you are only allowed to charge me X, and if you try to charge any more than that or withhold supplies, I’m going to sue you? Something just doesn’t sound right in that scenario. Sure, the main argument is that these countries are working together to fix prices, but then again, where does the U.S. get the majority of its oil? The answer is from non-OPEC countries, with Canada leading the way.

Is there some level of price fixing going on? Probably, but in reality, can we blame them for it? I don’t think so; they are doing what’s best for their economies and their countries. If they continue to raise prices, our defense has to be to stop buying from them. That is the only way we can and should be able to affect pricing. It is our own fault we have become so reliant on oil to fuel our country and economy, and now that these countries want to get paid, it is not our place, nor our right, to tell them otherwise. The oil belongs to them, not to us; they should be able to do with it what they will.

1 comment:

Anonymous said...

OPEC has little to do with our oil problem. Our lack of exploration, new refineries and new nuclear plants has put us in our current position.