A U.S. appeals court on Monday sided with several oil companies in a lawsuit alleging they colluded with then-President Donald Trump to negotiate with Russia and Saudi Arabia to cut oil production.
The lawsuit was filed by 24 consumers in March 2022, alleging that the oil giants colluded with the Trump administration to negotiate with Russia and Saudi Arabia to end their price war in 2020, which was triggered by the countries’ increased oil production that exceeded demand during the pandemic.
The court said that under the political question doctrine, Trump’s decision to negotiate with other countries was “a fundamental foreign relations decision” regardless of any alleged meddling by the oil firms.
“If we subjected it to judicial review, it would amount to second-guessing the Executive Branch’s foreign policy,” U.S. Circuit Judge Ryan Nelson stated in a 21-page opinion order.
“And if the President cannot freely negotiate with foreign powers, then he cannot properly execute the powers given to him by our Constitution.”
According to court documents, the plaintiffs alleged that Russia and Saudi Arabia demanded cooperation from the companies as a “quid pro quo” to end the price war. Nelson said the claims are barred by the state doctrine because they seek to litigate the petroleum policies of foreign nations.
The three-judge panel also found that the plaintiffs lacked circumstantial evidence that the oil companies conspired among themselves to raise oil prices in violation of antitrust law.
“Plaintiffs allege vague statements that ‘major oil companies’ planned to reduce their oil production. Yet Plaintiffs fail to allege which Defendants of these ‘major oil companies’ reduced their production, or when or how they allegedly made these decisions,” Nelson stated.
“Nor do Plaintiffs allege the amount of production cut or why these unnamed ‘major oil companies’ did so. Such bare and conclusory allegations do not ‘plausibly suggest’ an antitrust conspiracy.”
The defendants in the case include the American Petroleum Institute, Exxon Mobil Corporation, Chevron Texaco Capital Corporation, Phillips 66 Company, Occidental Petroleum Corporation, Devon Energy, Energy Transfer LP, Hilcorp Energy, and Continental Resources.
At the time of the price war that broke out in March 2020 between Russia and Saudi Arabia, three years of production and sales limits expired and Russia rejected new cuts proposed by OPEC. Russia and Saudi Arabia then both decided to boost production, leading to oil production far exceeding demand and a drop in oil prices with which the defendants now had to compete.
The plaintiffs alleged that the companies agreed among themselves “to take any surplus oil off the market, cut their production, and substantially reduce their investment in exploration and production.”
But when prices continued to drop, the companies sought an urgent meeting with Trump, hoping he would broker a deal with Russia and Saudi Arabia to end the price war. The agreements allegedly caused the price of a barrel of oil to rise from less than $20 to more than $100.
The plaintiffs had asked the lower court to enjoin any future agreements among the defendants, Russia, and Saudi Arabia. They also sought declaratory relief, damages, disgorgement of profits, and injunctive relief.
Lawyers for the consumer plaintiffs did not respond to The Epoch Times’ request for comment by publication time.
