A PYMNTS Company

FTC Targets Oil Executive John Hess Over Alleged Collusion with OPEC

By  |  September 30, 2024
FTC Targets Oil Executive John Hess Over Alleged Collusion with OPEC

The Federal Trade Commission (FTC) has turned its focus to John Hess, the CEO of Hess Corporation, accusing him of engaging in secretive talks with the Organization of the Petroleum Exporting Countries (OPEC) that may have contributed to inflated oil prices. These allegations were made in connection with the FTC’s approval of Chevron’s $53 billion merger with Hess, which includes a stipulation preventing John Hess from joining Chevron’s board of directors.

    Get the Full Story

    Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.

    Subscribe to our daily newsletter, PYMNTS Today.

    By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions.

    According to the New York Times, the FTC’s decision was narrowly approved in a 3-2 vote split along party lines. This marks the second instance this year where the FTC has accused a top oil executive of improper discussions with the oil cartel. In a similar move in May, the FTC placed restrictions on an Exxon Mobil merger, extracting a concession to keep the CEO from taking a board seat.

    FTC Chair Lina Khan underscored the severity of the allegations, arguing that increasing U.S. oil production should naturally lower prices for consumers. However, she contended that Hess’s alleged communications with OPEC risked furthering the cartel’s agenda to maintain high oil prices, counteracting the benefits of increased domestic production.

    We’d love to be your preferred source for news.

    Please add us to your preferred sources list so our news, data and interviews show up in your feed. Thanks!

    Add as Preferred Source

    Related: Senate Probes Oil Giants for Price-Fixing with OPEC

    Energy executives, especially in Houston—the epicenter of the U.S. oil and gas industry—have reacted with indignation, claiming that the FTC is overreaching its authority. Many insist that the agency’s actions amount to a political attack on the industry. Dan Eberhart, CEO of Canary and an adviser to Donald Trump’s campaign on energy policy, remarked, “The FTC is taking their mandate here too far. These deals are about making the industry more competitive with OPEC and keeping the cost of production down.”

    The FTC’s complaint against John Hess reveals a history of alleged improper interactions with OPEC dating back to 2016, when the cartel sought to prop up prices amid a U.S. shale oil boom that drove down global oil prices. Although the exact nature of these communications has been redacted, the FTC claims that Hess discussed oil-price trends with OPEC officials and even praised the group’s ability to manage prices at public forums.

    “Contacts between competitors about their commercial practices regarding output, prices, or other competitive dimensions, whether made in public or private, can undermine free and fair competition and violate antitrust laws,” the FTC stated.

    The FTC’s decision to prevent Hess from joining Chevron’s board stems from concerns that his presence could lead to closer alignment between Chevron’s operations and OPEC’s objectives, thereby stifling competition in the global oil market. While the agency has defended its actions as necessary to protect consumer interests and maintain competition, critics within the energy industry argue that such moves undermine U.S. companies’ ability to compete with OPEC, particularly in a volatile market.

    Source: The New York Times