Senate Democrats call for industry-wide investigation into Big Oil amid price-fixing and collusion allegations

Senate Democrats joined their House counterparts in calling for an industry-wide investigation into Big Oil collusion and price-fixing allegations, which they say cost US consumers at the pump while driving up corporate profits. 

Senate Majority Leader Chuck Schumer and nearly two dozen Senate Democrats on Thursday urged the US Department of Justice (DOJ) to fully investigate allegations of price-fixing in the oil industry, saying the DOJ must “protect consumers, small businesses, and the public from petroleum-market collusion.” 

Schumer and his Democratic colleagues penned a letter to Attorney General Merrick Garland addressing their concerns about actions taken by former Pioneer Natural Resources CEO Scott Sheffield, whose alleged collusion with oil cartel OPEC was detailed in a report from the Federal Trade Commission (FTC) earlier this month. 

OPEC, or the Organization of the Petroleum Exporting Countries, is an international cooperative of leading oil-producing countries that dates back to 1960. The group includes nations like Iran, Iraq, and Saudi Arabia, who work together to influence profits in the oil industry. The US is not a member of OPEC or its affiliated OPEC+. 

The FTC said Sheffield communicated with OPEC officials via text messages, WhatsApp communications, and public statements to push for reduced oil and gas output—a move that would lower supply, boost profits for Pioneer, and ultimately force American consumers to pay more at the gas pump. 

As a result of the FTC report, Sheffield and any other Pioneer “employees and directors” were banned from serving on the ExxonMobil board of directors following the company’s $65 billion acquisition of Pioneer. Schumer’s letter called this move an “important proactive step,” but pushed for criminal consequences, writing that “only the DOJ can prosecute and fully redress” alleged antitrust violations by Sheffield.

A statement from Pioneer said the company disagreed with FTC findings and defended Sheffield’s business practices. 

Big Oil collusion may have cost US households thousands annually

In their Thursday letter, Schumer and his colleagues called the Sheffield allegations “alarming,” saying they “lend credence to the fear that corporate avarice is keeping prices artificially high.”

The letter detailed the effects of alleged Big Oil price-fixing on everyday Americans, explaining that collusion in the industry might have contributed to a 49% decrease in the US oil production growth rate since the offset of the COVID-19 pandemic. 

This slowdown, the lawmakers said, may have cost the average US household up to $500 extra in annual fuel costs per car—all while Western oil companies raked in a collective “$300 billion in profits over the last two years, a surge that many market experts believe cannot be explained away by increased production costs from the pandemic or inflation.”

In an interview with More Perfect Union, FTC Chair Lina Khan explained how Big Oil leaders like Sheffield further contributed to skyrocketing gas prices in 2022, when President Joe Biden banned all imports on Russian oil in response to Russia’s invasion of Ukraine. Instead of ramping up oil production in the US to boost supply, CEOs like Sheffield avoided investment.

“The price stayed up because these companies were coordinating to restrict output,” Khan told reporter Faiz Shakir. “We saw Scott Sheffield try to coordinate with OPEC and say, ‘Hey, instead of us competing with you, why don’t we all just agree to cut back production and keep prices high?’”

In their letter, Schumer and his colleagues also pointed to national security concerns. 

“This alleged collusion with OPEC may have served to enrich countries like Iran and Russia that are actively seeking to undermine the United States and our allies,” their letter continued. 

‘Corporate malfeasance must be confronted’

Senate Democrats aren’t the first to call for Big Oil accountability in the wake of collusion allegations. Earlier this month, House Democrats announced a criminal investigation into the matter through a series of letters sent to seven Big Oil leaders, including Chevron, BP America, and ExxonMobil. 

The letters, spearheaded by Rep. Frank Pallone (D-NJ), outlined a list of demands from the House Committee on Energy and Commerce to Big Oil CEOs, including transcripts of all company communications with OPEC officials and records of “non-public communication” with shareholders regarding crude oil pricing. 

Pallone expressed concern about broader collusion, writing, “I am concerned that Mr. Sheffield’s behavior may represent common practices across the industry, as reporting and the FTC complaint have suggested.”

Schumer’s letter echoed these concerns, urging the Justice Department to expand its investigation beyond Sheffield and consider an industry-wide probe into the possibility of broader price-fixing conspiracies. Senate Democrats pointed to potential violations of the Sherman Act, an antitrust law that cracks down on monopolistic practices and imposes hefty fines—along with potential prison time—for corporations and individuals who partake in anticompetitive behavior like price-fixing. 

“Corporate malfeasance must be confronted, or it will proliferate,” the letter said. “If any oil corporations or executives have violated the Sherman Act, we urge you to follow the law and seek appropriate punishment.”