Corporations are forcing Americans to pay more for less – in their own words

In 2022, the Biden administration and the oil industry were in a brutal fight over oil prices. The president was demanding that domestic oil producers invest and drill more to address spiking costs, but Texas frackers were recalcitrant. “Whether it’s $150 oil, $200 oil, or $100 oil, we’re not going to change our growth plans,” the Pioneer CEO Scott Sheffield said, echoing comments from other leaders at different domestic firms. Profits would go to investors, not to more rigs to address pain at the pump.

The oil barons won the fight. Profits in the oil industry jumped from virtually nothing in 2020 in the hundreds of billions in 2021, and then doubled again in 2022. And yet, economists did not see any sort of plot at work. “Don’t blame the oil companies for their high profits,” said the economist Olivier Blanchard. “It is not price gouging, just how markets work.”

Three weeks ago, the Federal Trade Commission released information showing how naïve such statements really were. Sheffield, it turns out, allegedly helped engineer a price-fixing scheme to reduce oil production and increase prices for Americans at the pump. His goal was to end fierce competition in the industry, which had, as he put it, “lowered the price by $20 to $30 per barrel over the past 10 years”. The FTC banned Sheffield from his corporation’s board and has reportedly referred allegations against Sheffield to the Department of Justice for possible criminal investigation.

The magnitude of this alleged plot is stunning. Oil prices are controlled by the Organization of Petroleum Exporting Countries (Opec), a cartel composed of nations with known oil reserves. Because Opec is made up of governments, price-fixing law doesn’t apply. But these laws do apply to