Is The Big Oil Cartel Losing Its Influence?

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A week of the US/Israeli war against Iran continues on unabated, and the Iran military blockade of the Strait of Hormuz has infused more turmoil into an already dangerous situation. In a typical day, 20 million barrels of oil passes through the Strait, but nothing seems typical anymore in our dystopian era. Instead, the International Energy Agency (IEA) declares the war to be “the largest supply disruption in the history of the global oil market.” The halt on maritime traffic in the Strait is straining global supply chains and putting pressure on energy prices. Inquiring minds want to know: Why isn’t US Big Oil able to control the fluctuating Middle East energy landscape? Haven’t they maneuvered for a century as a functioning cartel to control oil prices and regulate oil supply chains?

In essence, what’s the disconnect between the seeming omnipotence of Big Oil and the current tenuous state of global energy affairs?

Oil futures are hovering around $100 a barrel, pushing more than 30 countries to release a record amount of oil from their emergency reserves. On Thursday, after three separate vessels sustained damage in Gulf waters, Iran warned that oil prices could climb to $200 a barrel. A big hitch seems that even fossil fuels extracted in the US depend on global supply chains, and not all kinds of oil produced domestically can be easily refined and used in the US. The Big Oil cartel intimated that a century of manipulation had that problem solved.

Are they worried? No, not really.

Fossil fuel company execs are actually smiling behind the scenes, recognizing that supply stoppages increase dependence on their current stockpile of domestic oil. Let the profits reign down!

US Big Oil: A Cartel A Century In The Making

When we think of a “cartel,” the first image that comes to mind is a vicious gang of drug dealers whose influence is far-reaching and dangerous. Hardly do we think about a cartel as a group of independent corporations that join together to fix prices, rig bids, allocate markets, or conduct other similar illegal activities. Yet that is how a cartel functions, so corporations meet the criteria for a cartel.

For anyone who lived through the gas crisis of the 1970s, where we could only buy gas for our cars every other day, the Organization of the Petroleum Exporting Countries (OPEC) was clearly a cartel that exerted market influence to control oil output and influence prices.

But the Big Oil cartel isn’t limited to OPEC. With early 20th century fears over facing increasing competition and excessive supplies of their productions, which would have driven down prices, oil conglomerates bonded together to create a stable pricing structure that benefited them intensely. Major US oil companies faced an oil glut, so they sought to stabilize their positions through a cartel-like agreement that aimed to divide oil resources and set production quotas.

Not only did this agreement pave the way for dominance of US oil companies in the Middle Eastern market, it also reshaped the landscape of international oil production and distribution. In these cynical times, it probably doesn’t come as a surprise that the original US oil cartel was supported through diplomatic channels by the federal government, which worked to secure oil supplies for national interests, particularly for military purposes.

By 1930, several domestic oil companies, with strong support from the US State Department, made ventures into Middle East oil concessions and laid the foundations for immense future US investments throughout this enormous area. Five out of the seven world’s great international oil companies were US based — Jersey Standard (Exxon), Standard Oil Company of New York (Mobil), Standard Oil of California (SoCal), Texaco, and Gulf Oil.

Fast forward to the 21st century and the existential threat of clean energy to the Big Oil cartel. Once-and-future President Donald J. Trump was a ready pawn to Big Oil’s enormous dream expansion goals. At a 2024 fund raiser at Mar-a-Lago, he offered an exchange of $1 billion in donations, a “deal,” so the US oil cartel could luxuriate in reduced taxes and regulations in his Administration.

Once returned to the Executive Office, the willingly culpable Trump shot down a host of renewable energy initiatives to placate his Big Oil billionaire pals. He pushed back against efficient light bulbs and appliances and eliminated home efficiency and EV tax credits. Concurrently, the largest US oil lobby group, American Petroleum Institute, put out a 2025 policy statement that outlined how meeting US growing energy demand required access to US resources, timely permitting, and policies that support investment. They boasted of “significant progress throughout 2025 to reset the trajectory of American energy policy.”

Collin Rees, US policy manager at the non-profit Oil Change International, told The Guardian, “Americans are seeing, in real time, the deep failings of Trump’s strategy. We’re seeing that he’s not doing anything to provide energy stability or price stability.”

It’s Time To Sue The US Oil Cartel

Abhi Rajendran, who leads oil market research at the analysis firm Energy Intelligence and is a fellow at Rice University’s Baker Institute for Public Policy, told Mother Jones this week that a tension exists between oil companies accruing profits or facing uncertainty and collapse. “Once you start getting to $100 or $100-plus range, then it starts becoming economically disruptive even for the oil companies,” he said. He added, “As long as oil prices remain where it doesn’t become disruptive and destructive, oil companies are going to benefit.”

On March 9, Mike Baker and Steven Rich of the New York Times published a long exposé of the corruption of US politics by billionaires. Big Oil’s cartel of billionaires remains robust today, even if the global energy dynamic is fragile due to the war with Iran.

Michigan’s state’s attorney general, Dana Nessel, has characterized the four fossil fuel majors and the top US oil lobbying group of acting as a “cartel.” The AP has filed suit against BP, Shell, Chevron and Exxon Mobil, as well as the American Petroleum Institute (API). The 126-page lawsuit accuses the defendants of engaging in a vast “conspiracy,” documented with evidence from a 1979 Exxon internal report that anticipated catastrophic global heating without a massive shift to renewable energy.

The Michigan lawsuit argues that the Big Oil cartel has:

• driven up Michigan utility costs — average residential rates increasing by nearly 120% in the last two decades;
• repressed information about fossil fuels’ dangers and the viability of renewables;
• joined forces to stifle the growth of renewable energy and electric vehicles — EVs “would be a common sight in every neighborhood;”
• used an array of tactics, including employing patent lawsuits to stop their competitors, using trade associations to coordinate “market-wide efforts” to skew investments toward oil and gas, and even hiring hackers to “surveil, intimidate and disrupt” journalists and activists;
• greenwashed information about the dangers of the climate crisis; and,
• violated federal and state antitrust laws.

“Rather than compete as leading producers of renewable energy products, the defendants and their co-conspirators conspired to suppress their own output of renewable energy, and restrain output by others,” the lawsuit said. Michigan is not alone in its attempt to characterize Big Oil as a cartel that has consciously and willfully engaged in climate deception: it joins 10 other states and about 60 sub-national governments that have sued big oil in recent years.

Although the Trump administration attempted to file against the state of Michigan, a federal judge tossed out the justice department’s motion.

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Resources

“Agenda for affordable, reliable, and secure American Energy.” American Petroleum Institute.

“Cartel.” Legal Information Institute. Cornell Law School.

“Iran war punctures Trump’s ‘drill, baby, drill’ promise on US gas prices, experts say.” Dharna Noor. The Guardian. March 12, 2026.

“Michigan accuses big oil of being ‘cartel’ that fuels climate crisis and high energy costs.” Dharna Noor. The Guardian. February 5, 2026.

“Oil and gas industry: A research guide.” Library of Congress.

“Oil companies cooperate in a cartel covering the Middle East.” Clifton K. Yearley. ECSCO Host. 2023.

“The scale of billionaires’ campaign donations is overwhelming US politics.” Mike Baker and Steven Rich. New York Times. March 9, 2026.

“Trump’s Iran war is driving up energy prices. Here’s who profits.” Tik Root. Mother Jones. March 10, 2025.