Any poll of American voters right now will show that the high price of goods and gasoline are first in their minds. However, the blame might not rest with President Joe Biden or former President Donald Trump, but with a single oil and gas mogul in Texas, according to the Texas Trade Commission.
Scott Sheffield is the former CEO of Pioneer Natural Resources, which was acquired by Exxon Mobil earlier this month for $59.5 billion. While the merger was being examined by the FTC, investigators found texts messages and emails from Sheffield to OPEC, the cartel of Arab oil-producing nations, encouraging them to limit production and raise the price of oil.
“The price went up because these companies were coordinating to restrict output,” says Lina Khan, the head of the FTC, in a video produced by More Perfect Union.
In the mid-2010s, the price of gas had dropped very low. The reason was because there was a sudden influx of oil from the West Texas Permian Basin, a lake of oil made available through fracking. One of the companies involved was Pioneer.
Sheffield and members of OPEC met at a dinner in 2017 called CERAweek, where new alliances were forged. According to messages obtained by the FTC, this is when Sheffield began encouraging OPEC and his state-based competitors to coordinate a rise in gas prices.
The next several years were tumultuous for the industry. The price rose slightly only to plummet again during the COVID lockdowns. Then, it rose again following the banning of oil imports from Russia after they invaded Ukraine. By 2022, the pandemic lockdowns were lifted and the price of oil skyrocketed. That year saw the highest oil profits on record.
Nor was the price just felt at the pump. The increased cost of fuel added to the inflation, driving up the price of food and consumer goods. More Perfect Union estimates the collusion to limit production and raise oil prices cost $200 billion, or roughly $3,000 per American household.
“The collusion in the oil industry tells us an important story about how inflation is happening,” says More Perfect Union’s Faiz Shakir in the video. “Inflation or high process isn’t simply the result of government spending, as some might argue, or the invisible hand of the marketplace. No, it’s the result of human hands at work. It’s in the texts of an oil CEO to a foreign oil minister saying, ‘let’s work together to keep oil prices high.’”
Sheffield denies the allegations of collusion. He referred to the Department of Justice for investigation by the FTC regarding the possible collusion. He was also barred by the FTC from serving on the Exxon board as part of the deal approving the merger.
