OPEC - U.S. Sovereign Status Part 1

Inside This Section:
OPEC Overview
Before OPEC
OPEC's Rise to Power
OPEC Price Fixing
OPEC - U.S. Sovereign Status Part 1
OPEC - U.S. Sovereign Status Part 2: Challenges
OPEC's Influence on the U.S.


In 1890, the US government passed the Sherman Antitrust Act in an effort to prevent anti-competitive tactics such as price-fixing within the US market. US cartels and monopolies targeted under the act include American Tobacco Company, John D. Rockefeller’s Standard Oil, AT&T and Northern Securities.

The Act does not expressly prohibit monopolies but it does prohibit and criminalize anti-competitive tactics, and it makes it illegal for the US government, as well as for private companies in the US, to deal with established cartels. The question then becomes why OPEC is permitted to sell oil to the US despite the existence and enforcement of the Sherman Act. The answer is rather underhanded, and goes a long way in explaining just how reliant the US is on foreign oil.

The US Congress grants OPEC sovereign nation immunity status—diplomatic immunity from prosecution, the same immunity enjoyed by individual nations. The problem is that OPEC is not a sovereign nation, it is a cartel of nations and therefore does not technically qualify for this status. They get it anyway.

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