The United States shale oil industry faces lawsuits and regulatory actions over alleged collusion to manipulate prices. 

American producers, tired of competing with OPEC on price, allegedly decided to join the cartel and cut supply to the market. 

Major companies such as ExxonMobil, Occidental Petroleum, and Diamondback Energy are implicated in legal challenges, with the most recent lawsuit was initiated on May 13 in a district court in New Mexico, closely following accusations by the Federal Trade Commission (FTC) against Scott Sheffield, the ex-CEO of Pioneer Natural Resources.

The FTC's allegations suggest that Sheffield attempted to orchestrate a reduction in oil output in collaboration with OPEC, a move aimed at driving up global oil prices. 

Reports indicate that Sheffield had extensive communications with OPEC representatives, discussing strategies to manage oil production and pricing effectively. 

“If Texas leads the way, maybe we can get OPEC to cut production. Maybe Saudi and Russia will follow. That was our plan,” Sheffield is quoted in the FTC filings. 

His discussions were not discreet, involving multiple stakeholders and even public threats aimed at ensuring compliance across the industry.

These manoeuvres have had significant implications for oil prices and economic conditions, particularly in the US. 

The strategy led to reduced oil output, contributing to a spike in oil prices that significantly influenced inflation rates. 

Analysis suggests that this collusion was responsible for about 27 per cent of the inflation increases in 2021, a critical factor as the economy rebounded from the pandemic-induced downturn.

The legal battles and the FTC's crackdown could potentially reshape the US shale industry. 

The Exxon-Pioneer merger, although permitted, was conditioned with stringent measures, including barring Sheffield from any board or advisory roles at Exxon. 

This case highlights the growing scrutiny of corporate practices in essential industries and their broader implications on economic policies and consumer costs.