18 Oil Companies Targeted in Price Gouging Lawsuit

A judicial panel has grouped together more than a dozen lawsuits alleging that U.S. oil companies were involved in a conspiracy to limit shale oil production in order to drive fuel prices for end consumers higher.

The case will be heard by Albuquerque judge Matthew Garcia, who, Reuters reports, is a former chief of staff for New Mexico Governor Michelle Grisham—a Democrat.

The lawsuits target companies including Hess Corp., Pioneer Natural Resources, Occidental Petroleum, Diamondback Energy, Permian Resources, Chesapeake Energy, Continental Resources, and EOG Resources. They have argued that the case should be dismissed due to the absence of any claim under antitrust law in the plaintiffs’ complaints.

The original lawsuits originate with individual plaintiffs in several states, with the first filed in Nevada in January this year. The plaintiffs in that case alleged that several oil companies, among which Pioneer, Oxy, and Continental “have collectively coordinated their production decisions, leading to production growth rates lower than would be seen in a competitive market.”

The lawsuits were echoed by Democratic legislators earlier this year after the Federal Trade Commission accused Pioneer’s ex-CEO Scott Sheffield of colluding with OPEC to reduce oil supply in 2020.

A group of Democratic senators followed up on the accusations with an investigation into Big Oil companies for evidence of collusion with the international oil cartel. The case targets a total of 18 companies.

The investigation was launched by the Senate budget committee, which requested the companies to provide communications between any employees and representatives of 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.” The committee has also requested information on any communications with OPEC+ producers.

Scott Sheffield has rejected FTC’s accusations of collusion, noting that the decline in oil production in 2020 was an industry response to the plunge in international oil prices.

By Irina Slav for Oilprice.com

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