Commodities firm sues Shell, BP, Statoil for price fixing

Two weeks after European anti-trust authorities began an investigation into three of the world’s biggest oil companies on suspicion of price fixing, a commodities firm in Chicago has filed suit against the companies. The lawsuit brought by Prime International Trading, which trades crude oil, accuses BP, Royal Dutch Shell and Statoil of colluding to fix oil prices.

In the class action, which was filed in New York, Prime International is claiming damages based on the accusation that the oil companies intentionally manipulated and conspired to fix the price of Brent Crude oil, the global benchmark. It also accuses the companies of conspiring to fix the price of future contracts.

Even small distortions to benchmark crude oil prices can have huge impact on consumers, according to the EU Commission, which is investigating major oil companies for price fixing. A US commodities firm has now sued the companies for allegedly colluding to fix prices.

Legal documents filed state, “By purposefully reporting inaccurate, misleading and false Brent Crude oil trade information to Platts, defendants manipulated and restrained trade in both the physical (spot) Brent Crude oil market and the Brent Crude oil futures market,” according to the Financial Times. Information obtained from Platts is used to price contracts in Brent Crude. Platts publishes benchmark prices, which are used to determine how much refiners pay for crude and distributors pay for gasoline and diesel.

Because the reporting system to Platts used by oil traders lacks the transparency of a public exchange, there is greater opportunity for price fixing among the oil companies. The London offices of Platts were reportedly subject to “unannounced inspections” by authorities, as well as those of the three oil companies named in the lawsuit.

As many as fifty other defendants who have participated in the alleged price manipulation could be named in the lawsuit,

The Commission, the executive arm of the European Union, stated that it had concerns that the oil companies may have colluded in reported “distorted prices,” saying that “Even small distortions of assessed prices may have a huge impact on the prices of crude oil, refined oil products and biofuels,” all of which could potentially be harmful to consumers.

Did you miss this?

Other Popular Stories

  • SpaceX lost 40 satellites to solar storm, estimated cost of $10 to $20 million
  • Recycling copper wire — copper can be recycled repeatedly without loss of quality
  • Astronauts Harvest Radishes on Space Station
  • Valves essential component of safe oil pipeline
  • Bombardier delays delivery of CSeries jets
  • NASA Testing Technology Designed to Fold Wings During Flight
  • Ford hiring 1,000 at Oakville assembly plant
  • Canada's prosperity at risk from disruption, lack of skilled workforce: reports
  • Wood groups praising new six-storey construction limit
  • Researchers Discover Surprising Role for Water in Energy Storage
  • Bombardier has to delay CSeries first test flight again
  • Ontario invests $488,250 to create new jobs in Subdbury and expand research in mining.
  • Large investment in Toronto biotech company could lead to new therapies for heart patients
  • Toronto Hydro testing underwater energy storage system for backup power
  • Greater transparency, accountability called for in new homes warranty plan for Ontario
  • Global car sales up, luxury auto market surging in Canada: Scotiabank
  • Cars and oil pulled Canada's manufacturing down in September
  • Magna International posts strong sales gains in third quarter
  • Continued strength in manufacturing in November: RBC
  • Thunder Bay wind farm gets government approval
Scroll to Top