US Oil Companies Under Scrutiny for Possible Price Fixing with OPEC
The US Senate Budget Committee has launched an investigation into domestic oil producers, seeking to determine whether they have illegally coordinated oil prices with the Organization of the Petroleum Exporting Countries (OPEC), as reported by Reuters on Thursday. This probe represents the latest effort by Democratic lawmakers to pressure energy companies.
The committee is investigating Exxon Mobil, Chevron, ConocoPhillips, and 14 other oil producers. The probe was initiated by Senator Sheldon Whitehouse, a Democrat and chairman of the Budget Committee, who expressed concern about potential anti-competitive activities between oil companies and OPEC+.
“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 Whitehouse in letters sent to the oil producers.
The probe comes after the US Federal Trade Commission (FTC) barred former Pioneer Natural Resources CEO Scott Sheffield from Exxon's board on allegations that he attempted to collude with OPEC to raise oil prices. Sheffield has denied these allegations.
The American Petroleum Institute (API), an industry group, denounced the investigation as an "election year stunt." API spokesperson Bethany Williams said, "This is yet another election-year stunt to distract from misguided policies as the administration continues to look to foreign producers to meet growing demand for affordable, reliable energy."
The probe has been spurred by growing concerns about rising oil prices and the potential for collusion between US oil producers and OPEC+, a production group that includes OPEC and Russia. The Biden administration is currently replenishing the Strategic Petroleum Reserve (SPR) after selling 180 million barrels in 2022 to attempt to keep fuel prices in check following Russia's invasion of Ukraine.
The Senate Budget Committee has requested that the oil companies provide any communications between them and members of the OPEC Secretariat and OPEC+ concerning oil output, crude oil prices, and the relationship between production and pricing of oil products from January 2020 to the present.
"This probe is an attempt to understand the relationship between oil production, pricing, and the recent rise in fuel prices. Whether or not it's a successful endeavor remains to be seen," states Reuters.