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Senate Probes Oil Giants for Price-Fixing with OPEC

 |  June 27, 2024

The US Senate Budget Committee, spearheaded by Democratic lawmakers, announced on Thursday the initiation of an investigation into major domestic oil producers. The probe aims to uncover any illegal coordination efforts with the Organization of the Petroleum Exporting Countries (OPEC) to manipulate oil prices.

According to sources from Reuters, the inquiry targets several prominent energy firms, including Exxon Mobil, Chevron and ConocoPhillips, among others. These companies did not immediately respond to requests for comments.

The heightened scrutiny by Democratic lawmakers follows a recent incident involving former Pioneer Natural Resources CEO Scott Sheffield. Last month, the U.S. Federal Trade Commission (FTC) barred Sheffield from joining Exxon’s board amidst allegations that he attempted to collude with OPEC to elevate oil prices.

The FTC’s decision coincided with its approval of Exxon’s $60 billion acquisition of Pioneer Natural Resources. Sheffield has since denied these allegations.

Senator Sheldon Whitehouse, a Democrat from Rhode Island and the chairman of the Senate Budget Committee, has been vocal about the need for this probe. “Based on recent events involving Pioneer Natural Resources, 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,” Whitehouse said in a statement to Reuters.

OPEC+, a coalition that includes OPEC and non-OPEC countries like Russia, recently agreed to cut production, a move that has significant implications for global oil prices. The Biden administration is currently in the process of gradually replenishing the Strategic Petroleum Reserve (SPR) after selling 180 million barrels in 2022 to mitigate the impact of rising fuel prices following Russia’s invasion of Ukraine.

In response to the Senate’s investigation, the American Petroleum Institute (API), an industry group representing the interests of oil and gas companies, dismissed Whitehouse’s probe as an “election year stunt.”

Related: Reuters