A federal judge has allowed antitrust lawsuits accusing some of the biggest U.S. shale producers of coordinating production cuts to keep oil and fuel prices higher to proceed.
U.S. District Judge Matthew Garcia in New Mexico rejected efforts by Diamondback Energy, Occidental Petroleum and other producers to dismiss the consolidated litigation. The lawsuits, filed beginning in 2024, allege that producers restrained shale output and ultimately pushed up prices for crude oil, gasoline, diesel and heating oil.
Garcia found the plaintiffs had plausibly alleged a conspiracy based on production decisions, market conditions, communications and public statements. He also said the complaints identified interactions among producers that went beyond the normal exchange of industry information.
That is a long way from proving price fixing. Diamondback, Occidental and the other defendants deny wrongdoing and argue that actual production data cuts against the allegation. Several producers expanded output during the period in which plaintiffs claim the industry was coordinating reductions.
The case still puts a very different legal lens on something shale executives have spent years calling capital discipline.
U.S. producers largely abandoned the old drill-at-any-price model after investors demanded better returns, lower debt and more cash. Companies became slower to respond to higher oil prices with additional rigs and wells. The plaintiffs are arguing that at least some of that restraint crossed the line from individual corporate decisions into coordinated production management.
Garcia also rejected the producers’ argument that the case would require a court to wade into U.S. energy and foreign policy. The relevant question, he wrote, is whether domestic companies and individuals coordinated production cuts, something antitrust law already covers.
Shale’s ability to respond quickly to higher prices has long been one of the oil market’s biggest supply buffers. The court will now examine whether decisions to restrain that supply were made independently or together.
By Julianne Geiger for Oilprice.com
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