Congressional Democrats are launching an investigation into whether leading US oil companies have colluded with each other and with OPEC to inflate prices at the pump. Rep. Frank Pallone Jr., the ranking member of the House Committee on Energy and Commerce, sent a letter to ExxonMobil, Chevron, Hess, BP America, and three other fossil fuel companies demanding documents and communications to determine if they have manipulated global oil markets to harm American consumers. The investigation comes after the Federal Trade Commission accused the CEO of a leading Texas producer, Scott Sheffield, of conspiring with OPEC and its allies to boost prices. Pallone expressed concern that Sheffield’s behavior may be common across the industry.
OPEC and OPEC+ are established to coordinate production among members, while US oil production is supposed to be decided by the free market. It is prohibited by federal law for oil CEOs to decide whether to raise or lower production, as this could lead to price-fixing and competition restrictions. Pallone pointed out that without these protections, American consumers would be at the mercy of OPEC and OPEC+ member nations. The investigation is targeting Exxon, Chevron, BP America, Hess, Shell USA, Occidental, and Devon Energy, with demands for documents including communications with OPEC representatives and competitors, efforts to influence oil production, and meetings with government officials.
The Federal Trade Commission allowed Pioneer to be sold to ExxonMobil for $60 billion under an agreement that prevents Sheffield from sitting on Exxon’s board or serving as an adviser. Sheffield was among the oil CEOs who testified before Pallone’s committee on Big Oil and gas prices. Exxon stated that they learned of the allegations against Sheffield from the FTC and that the behavior described is inconsistent with their business practices. Pioneer defended Sheffield, stating that his communications were not intended to circumvent laws protecting market competition and that the FTC’s complaint reflects a misunderstanding of oil markets and Sheffield’s intentions.
Pallone argued that public data suggests US oil producers did not increase drilling during the time that Sheffield was allegedly influencing his rivals. The letter sent by Pallone demanded a variety of documents from the oil companies, including communications with OPEC and OPEC+ representatives, meeting lists, communication with competitors regarding production, nonpublic communications with shareholders, and attempts to influence government decisions on oil production. Additional document demands were sent to Exxon, focusing on communications between Pioneer employees and OPEC representatives involved in production plans. It remains to be seen how the companies respond to these demands and what further actions will be taken in the investigation.
The investigation into potential collusion between US oil companies and OPEC to inflate prices at the pump raises concerns about market manipulation and the impact on American consumers. The accusations against Scott Sheffield and the broader allegations of industry practices point to the need for transparency and adherence to antitrust laws. The outcome of the investigation will shed light on whether these allegations are isolated incidents or represent a larger pattern within the industry. Congressional Democrats are committed to ensuring fair competition in the oil market and protecting American consumers from price manipulation and unfair practices.
