In Case No. 2:24-cv-00103 filed UNITED STATES DISTRICT COURT, DISTRICT OF NEVADA against a group of major US oil and gas companies, including:
Permian Resources Corp. (formerly Centennial Resource Development, Inc.), Chesapeake Energy Corporation, Continental Resources Inc., Diamondback Energy, Inc., EOG Resources, Inc., Hess Corporation, Occidental Petroleum Corporation, and Pioneer Natural Resources Company. Regarding the Sherman Antitrust Act violation, the plaintiffs presented a body of evidence indicating that these companies restricted production in US shale oil industry in order to control prices. Among this evidence is the scientific findings of research by Assistant Professor Maitham Abdul Hamid, a lecturer at College of Industrial Management for Oil and Gas at Basra University for Oil and Gas. The research is: "The Effect of US Shale Oil Production on Local and International Oil Markets" published in the International Journal of Energy Economics and Policy
one of the world's leading journals for analyzing strategic policies and future trends in global energy markets, and ranked second in the Scopus rankings (Q2). The research demonstrates how shale oil revolution in the United States has not only transformed oil markets, but has also reshaped global economic and geopolitical balances through advanced production technologies. This has enabled the United States to reduce its dependence on imported oil, giving it greater influence in the international arena. The most important findings of the research are summarized as follows:
- Changing the structure of global oil trade:
The rise in US shale oil production has reduced the share of traditional oil producers, such as OPEC countries, in the global market, negatively impacting their financial revenues.
- The role of technology in reducing costs:
Technological developments, particularly in the fields of hydraulic fracturing and horizontal drilling, have contributed to reducing the costs of shale oil production, making it more economically viable and less sensitive to price fluctuations than before.
- The transformation of the United States into a major producer and exporter:
The United States has become the world's largest producer of crude oil, surpassing Saudi Arabia and Russia, and has returned to exporting oil after a hiatus of more than four decades, significantly reducing its dependence on oil imports.
- Impact on OPEC policies:
The flexibility of US shale oil production has forced OPEC to reconsider its production strategies, as it has become more difficult to control prices as it had been in the past.
- Domestic economic impacts:
The increase in shale oil production has contributed to strengthening the US economy by creating new jobs and increasing investments in the energy sector.
The plaintiffs relied on the scientific results of the models used in this research to demonstrate that the decline in the break-even price of US shale oil in the American shale oil industry made it more resilient to global price fluctuations. In other words, even with significantly lower prices, the shale oil industry continued to expand, and the plaintiffs used these results to suggest that any production constraints were not due to market pressures.
The research also demonstrated how technological advances in hydraulic fracturing and horizontal drilling have reduced the costs of shale oil production, making it more economically viable and less sensitive to price fluctuations than before, thus demonstrating the competitiveness of the US market.
The Sherman Antitrust Act is the same law that the US Supreme Court relied on to break up Standard Oil, the giant oil production, transportation, refining and marketing company in the United States of America, which controlled nearly 90% of the total oil refining in the United States. It was broken up in 1911 into 34 companies, two of which later merged to form the giant oil company Exxon Mobil.
