Washington, D.C.—Reacting to Saudi Arabia’s visit to Moscow as part of ongoing efforts to collude on future oil production levels, Securing America’s Future Energy (SAFE) President and CEO Robbie Diamond calls on American policymakers to pass measures enabling a deeper understanding of how OPEC and national oil companies subverts free-market principles and transparency in oil markets.
“How many meetings between OPEC, Saudi Arabia, and Russia will it take before Congress takes concrete steps to protect our national interests?” said Diamond. “This cartel and its partners attempt to manipulate both market sentiment and supply-demand fundamentals, which contributes to long-term instability and undermines our economic interests. It is the responsibility of policymakers to counter this vulnerability by supporting efforts to understand how these activities impact our economy and national security, while supporting long-term policies to reduce our oil dependence.”
Following last week’s extension of the OPEC and non-OPEC production cut, which failed to swing oil prices to desired levels, OPEC and Russia are intensifying their dialogue and deepening efforts to exert influence over the oil market. Recent meetings have been held under the premise of bringing stability to the market by cutting global oversupply—however, the long-term goal of OPEC and Russia’s collaboration is higher prices, and the short-term impact is greater uncertainty and reactionary price volatility. Furthermore, the unprecedented collaboration between the two former rivals, who together control 20 percent of global oil supply, undermines the interests of consumers who have benefitted from longstanding competition between the two countries.
While U.S. shale has succeeded in undermining OPEC’s position, the cartel and its partners are solidifying an alliance that increases their current and future market power. Reports surfaced last week that OPEC plans to intentionally reduce shipments to the U.S. in order to spur greater draws in U.S. oil inventories, which will have a heightened impact on global oil prices.
SAFE urges Congress to pass H.R. 545—legislation that was introduced to shed light on how OPEC’s actions have impacted American producers and consumers of oil. With 92 percent of the U.S. transportation system powered by petroleum products, oil prices have an outsized impact on the nation’s economy. To mitigate the impact of oil price volatility in the long-term, SAFE advocates for a range of policies designed to reduce the country’s oil dependence. These include increasing domestic production, modernizing and strengthening fuel economy standards, adoption of advanced transportation fuels including electricity and natural gas, and the expeditious deployment of autonomous vehicles.
About Securing America’s Future Energy (SAFE)
Securing America’s Future Energy (SAFE) is an action-oriented, nonpartisan organization that aims to reduce America’s dependence on oil. Near-total dependence on petroleum in the transportation sector undermines the nation’s economic and national security, and constrains U.S. foreign policy. To combat these threats, SAFE advocates for expanded domestic production of U.S. oil and gas resources, continued improvements in vehicle fuel efficiency, and the advancement of alternative fuels in the transportation sector including electric vehicles and natural gas trucks. In 2006, SAFE joined with General P.X. Kelley (Ret.), 28th Commandant of the U.S. Marine Corps, and Frederick W. Smith, Chairman, President, and CEO of FedEx Corporation, to form the Energy Security Leadership Council (ESLC), a group of business and former military leaders committed to reducing the United States’ dependence on oil.
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