Oil magnate accused of price manipulation with OPEC

Federal regulators have filed serious charges against Scott Sheffield, a prominent figure in the US oil industry, accusing him of trying to collude with OPEC and its allies to artificially raise oil prices.

According to the Federal Trade Commission (FTC), Sheffield, who was previously CEO of Pioneer Natural Resources, was in communication with OPEC representatives discussing pricing, production and market dynamics. The FTC alleged that these communications were intended to align oil production in the Permian Basin with OPEC's strategies, using a variety of channels, such as text messages, in-person meetings and public statements.

The FTC alleged that Sheffield's actions were intended to increase the profitability of Pioneer Natural Resources and other oil companies affiliated with OPEC and OPEC+ countries. Unlike OPEC countries, where production decisions are often coordinated among major players, US oil production is usually determined by market forces rather than collusion.

Scott Sheffield will retire as CEO of Pioneer Natural Resources in December 2023. Under his leadership, the company has become a leading producer in the Permian Basin, an important region that has contributed to the US's status as the world's largest oil and gas producer . Despite Sheffield's retirement, the FTC's allegations cast a shadow over his legacy and the operations of Pioneer Natural Resources.

The FTC's charges highlight concerns about potential harm to consumers and the economy, particularly in relation to inflated fuel prices at gas stations. They allege that Sheffield actively campaigned to orchestrate coordinated output cuts between US oil producers and OPEC/OPEC+ countries, which undermined fair market competition.

In addition, the FTC accuses Sheffield of lobbying to limit oil production in the Permian region during the early stages of the Covid pandemic, actions they say would have artificially inflated crude oil prices.

In response to the allegations, both Pioneer Natural Resources and ExxonMobil, which is set to acquire Pioneer, issued statements denying any wrongdoing.