An Oil Price-Fixing Conspiracy Caused 27% of All Inflation Increases in 2021

[Passages]

President Biden's sledgehammer Lina Khan at FTC.

Matt Stoller
MAY 03, 2024

I’m at the Google antitrust closing arguments, and I’ll have some thoughts on that soon. But today’s piece is about some bombshell evidence that just came out on a giant post-Covid conspiracy in the oil industry. And I do mean giant, because there’s now evidence that price-fixing in the oil industry alone may single-handedly be responsible for a little over a quarter of the total inflationary increase in 2021.

Let’s dive in.

Last Sunday, I wrote a piece alleging that U.S. shale oil producers colluded with the Saudi government from 2021-2023 to drive up gas prices. That essay was based on some reporting I had done, as well as a complaint from a savvy Kansas City class action law firm, Sharp Law, with special expertise in oil. The theory was that American producers, after a bitter price war from 2014-2016, got tired of competing on price with the Organization of Petroleum Exporting Countries, or the OPEC oil cartel, and at some point from 2017-2021, decided to join the cartel and cut supply to the market. This action had the affect of raising oil prices, costing oil consumers something on the order of $200 billion a year.

Yesterday, the Federal Trade Commission released evidence confirming that collusion played a serious role in hiking oil prices at that time. Pioneer Natural Resources CEO Scott Sheffield, a leader in the fracking field, “exchanged hundreds of text messages with OPEC representatives and officials discussing crude oil market dynamics, pricing and output.” Sheffield was explicit about his goal, saying that “if Texas leads the way, maybe we can get OPEC to cut production. Maybe Saudi and Russia will follow. That was our plan,” he said, adding: “I was using the tactics of OPEC+ to get a bigger OPEC+ done.” He talked to shareholders, publicly threatened rivals, and ultimately achieved output cuts across the industry regardless of price. “Even if oil gets to $200/barrel,” he said, “the independent producers are going to be disciplined.”
https://www.thebignewsletter.com/p/an-oil-price-fixing-conspiracy-caused

[Think. Again.]

1. Thanks for posting this...

...too many people seem to think that corporations (of any kind) have some sort of inherent moral code they are magically bound to and just blindly trust them.

[Passages]

2. Yes and the free market nonsense.

[wolfie001]

5. I'm a retired Union worker

From my point of view, for what it's worth, is that all US corps are crappy. It's the level of crap that's important. How deep and wide.

[Bluethroughu]

3. Dems should be having this blasted in News Conferences all over the TV.

And saying we need a rebate for American consumers paid for by the oil industry.

[Think. Again.]

4. YES!

At the very least, they need to be held responsible for the cost of cleaning up the damage that they made trillions of dollars from causing.

[jalan48]

6. Too bad the Chairman of the Senate Energy Committee, Joe Manchin, is retiring. He would have been all over this.

[Think. Again.]

7. You can borrow this one....

[BunnyMcGee]

9. He probably knew

at least something of collusion. Speculation, but he avoided Democratic initiatives and helped the industries.

[HandmaidsTaleUntold]

8. Let Joe Be Our Retribution

[erronis]

10. Joe, as in Brandon; not as in Manchin. Right?

In any case I'd really prefer that the normal regulations and adequate enforcement and punishment be the correct form of correction.

[Backseat Driver]

11. All those (black-gold) aspens (always humming right along) turning together?

I'm certain "energy" cabals go back further...coal burning longer than sticks?

[FakeNoose]

12. Lina Khan brings it, every time!

Thank you FTC

[AwakeAtLast]

13. Was this what Jared Kushner got $2B for?

[Wednesdays]

14. I would not be the least bit surprised. nt