18 oil companies sued for price gouging

A judicial panel has consolidated more than a dozen lawsuits accusing U.S. oil companies of conspiring to restrict shale oil production in order to raise fuel prices for end consumers.

The case will be heard by Albuquerque judge Matthew Garcia, who Reuters reported was a former chief of staff to New Mexico Gov. 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 argued the case should be dismissed due to the lack of any antitrust claim in the plaintiffs’ complaints.

The original lawsuits are from individual plaintiffs in several states, with the first one filed in Nevada in January of this year. The plaintiffs in the case alleged that several oil companies, including Pioneer, Oxy, and Continental, “collectively coordinated their production decisions, resulting in lower production growth rates than those observed in a competitive market.”

The lawsuit was reiterated by Democrats earlier this year after the Federal Trade Commission charged former Pioneer CEO Scott Sheffield with colluding with OPEC to cut crude oil supplies in 2020.

A group of Democratic senators continued the accusations, launching an investigation into major oil companies to find evidence of collusion with an international oil cartel. The case involves a total of 18 companies.

The investigation was initiated by the Senate Budget Committee, which asked the companies to provide communications between employees and OPEC representatives “concerning crude oil production, crude oil prices, and the relationship between production and prices of petroleum products from January 1, 2020 to the present.” The committee also requested information on any communications with OPEC+ producers.

Scott Sheffield dismissed the FTC’s accusations of collusion, noting that the decline in oil production in 2020 was the industry’s response to a sharp decline in global oil prices.

By Irina Slav for Oilprice.com

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