US Senate Committee Investigates Oil Producers for Price Collusion with OPEC, Reports Reuters

By Timothy Gardner

WASHINGTON (Reuters) – On Thursday, the U.S. Senate budget committee initiated an investigation into domestic oil producers regarding possible illegal coordination of oil prices with the Organization of the Petroleum Exporting Countries (OPEC). This action reflects ongoing pressure from Democratic lawmakers on energy companies.

The inquiry encompasses major producers, including Exxon Mobil, Chevron, ConocoPhillips, and 14 others. The three main companies mentioned did not immediately respond to requests for comments, while BP and Shell chose not to comment.

Interest among many Democratic lawmakers in potential collusion among oil companies surged last month following a move by the U.S. Federal Trade Commission (FTC) that barred former Pioneer Natural Resources CEO Scott Sheffield from Exxon’s board. Sheffield faces allegations of attempting to collude with OPEC to increase oil prices, coinciding with Exxon’s $60 billion acquisition of Pioneer.

Sheffield has denied the FTC’s allegations.

Senator Sheldon Whitehouse, a Democrat and chairman of the Budget committee, called for the investigation into these companies. He expressed concern about the possibility of oil and gas companies engaging in collusive and anti-competitive practices with OPEC+, which could lead to higher prices impacting American families and the U.S. government, particularly concerning crude oil for the Strategic Petroleum Reserve (SPR).

OPEC+ is a coalition that includes OPEC and Russia, which has agreed to cut production. The Biden administration is gradually replenishing the SPR after selling 180 million barrels from the reserve in 2022 to stabilize fuel prices in the wake of Russia’s invasion of Ukraine.

The American Petroleum Institute (API) criticized the investigation, calling it an "election year stunt." API spokesperson Bethany Williams stated that this move is aimed at diverting attention from what she described as misguided policies, as the administration seeks foreign producers to satisfy the increasing demand for reliable, affordable energy.

President Biden, a Democrat, is seeking re-election in November, while Whitehouse, a strong advocate for climate change policies, is campaigning for a fourth term in the Senate.

Earlier this month, a group of nine Democrats in the U.S. House of Representatives urged the Justice Department to investigate potential antitrust behavior involving U.S. oil producers and OPEC. In May, Senate Majority Leader Chuck Schumer and 22 Democratic colleagues sent a similar request to Attorney General Merrick Garland.

Whitehouse has requested that the companies submit any communications between them and members of the OPEC Secretariat and OPEC+ regarding oil output, crude oil prices, and the interplay between production and pricing of oil products from January 2020 to the present.

OPEC did not immediately respond to requests for comment.