Budget Committee Initiates Probe into Suspected Collusion Between Big Oil and OPEC
Mounting evidence suggests the oil and gas industry may be illegally coordinating with foreign cartel to depress production and raise prices on consumers
Washington, D.C.—Senate Budget Committee Chairman Sheldon Whitehouse (D-RI) has launched an investigation demanding answers from 18 oil producers about any efforts to illegally coordinate with the Organization of the Petroleum Exporting Countries—the international oil cartel—or representatives of its member countries that would artificially raise prices on American consumers and increase costs for the federal government.
The new probe follows revelations from the Federal Trade Commission that former Pioneer CEO Scott Sheffield attempted to work with OPEC to manipulate global oil and gas production,
increase oil and gas prices, and boost his company’s profits. The FTC completed its investigation as part of its review of ExxonMobil’s bid to acquire Pioneer, a $64.5 billion deal that represents the largest fossil fuel merger in 20 years.
“Based on recent events involving Pioneer Natural Resources Company, soon to merge with ExxonMobil Corporation, I am concerned about the possibility that oil and gas companies could be engaging in collusive, anti-competitive activities with OPEC+ that would raise crude oil prices, resulting in higher costs not only for American families, but also for the U.S. government when it acquires crude oil for the Strategic Petroleum Reserve,” wrote Chairman Whitehouse in letters sent to the CEOs of APA Corporation, BP, Chesapeake Energy, Chevron, ConocoPhillips, Continental Resources, Crownquest, Diamondback Energy, Endeavor, EOG Resources, ExxonMobil, Hess, Marathon, Occidental, Ovintiv, Permian Resources, Shell, and SM Energy.
A recent report found that illegal crude oil price-fixing schemes may have caused over 25 percent of the increase in inflation that hurt many American families in the wake of the COVID- 19 pandemic, and the FTC’s findings suggest that Sheffield and Pioneer may not have been the only ones engaging in collusive activities. Furthermore, recent private class action lawsuits filed against oil producers operating in the Permian Basin region accuse those producers of illegally working together to depress oil production and price-gouge Americans.
“In view of the findings against Sheffield, I seek to understand whether other oil producers operating in the United States may also have been coordinating with OPEC and OPEC+ representatives concerning oil production output, crude oil prices, and the relationship between the production and pricing of oil products,” continued Chairman Whitehouse.
The Committee has requested the following by July 12, 2024:
1. Communications between and among companies’ corporate and affiliate officers and members of the OPEC Secretariat concerning oil production output, crude oil prices, and the relationship between the production and pricing of oil products, dating from January 1, 2020 through the present; and
2. Communications between and among companies’ corporate and affiliate officers and OPEC/OPEC+ concerning oil production output, crude oil prices, and the relationship between the production and pricing of oil products, dating from January 1, 2020 through the present.
Following the FTC’s release of evidence concerning Sheffield’s alleged coordination with OPEC officials, Senator Whitehouse recently joined Majority Leader Schumer (D-NY) and 21 other colleagues to urge the Department of Justice to use every tool at its disposal to prevent and prosecute collusion and price fixing in the oil industry.
This Congress, the Budget Committee has exposed Big Oil’s decades-long campaign to avoid accountability for damages from climate change while continuing to obstruct climate action and rake in record profits. Chairman Whitehouse and Senate Finance Committee Chair Ron Wyden (D-OR) launched an investigation into eight oil and gas companies and a major trade association following reports that former President Donald Trump solicited a quid pro quo from Big Oil executives, promising to roll back climate regulations in exchange for campaign cash.
A multi-year probe by the Senate Budget Committee and Democrats on the House Oversight and Accountability Committee exposed the industry’s pattern of making deceptive claims regarding its products, their effects on the climate, and its plans to reduce emissions and combat climate change. Chairman Whitehouse and House Oversight Ranking Member Raskin recently called on the Department of Justice to investigate.
Click here to read the letter to APA Corporation.
Click here to read the letter to BP.
Click here to read the letter to Chesapeake Energy.
Click here to read the letter to Chevron.
Click here to read the letter to ConocoPhillips.
Click here to read the letter to Continental Resources.
Click here to read the letter to Crownquest.
Click here to read the letter to Diamondback Energy.
Click here to read the letter to Endeavor.
Click here to read the letter to EOG Resources.
Click here to read the letter to ExxonMobil.
Click here to read the letter to Hess.
Click here to read the letter to Marathon.
Click here to read the letter to Occidental.
Click here to read the letter to Ovintiv.
Click here to read the letter to Permian Resources.
Click here to read the letter to Shell.
Click here to read the letter to SM Energy.
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