LONDON/OSLO – European authorities have raided offices of oil majors Shell, BP and Statoil as part of a probe into suspected manipulation of oil prices, one of the biggest cross-border actions since the Libor rigging scandal.
Authorities have sharply raised scrutiny of financial benchmarks around the world since slapping large fines on some of the world's biggest banks for rigging two interest rate benchmarks - Libor and Euribor.
On Tuesday, the European Commission said it was investigating major oil companies over suspected anti-competitive agreements related to submission of prices to Platts, the world's leading oil pricing agency and part of McGraw Hill Group .
"Officials carried out unannounced inspections at the premises of several companies active in and providing services to the crude oil, refined oil products and biofuels sectors," the Commission said. The inspections took place in two EU member states and one non-EU country, it said.
"The Commission has concerns that the companies may have colluded in reporting distorted prices to a price reporting agency to manipulate the published prices for a number of oil and biofuel products".
Calls from regulators have been abundant to review all benchmarks around the world, including for oil, and came from as high as the chairman of the U.S. Commodity Futures Trading Commission, Gary Gensler.
Last year, global financial regulators backed away from a proposal to regulate oil price reporting media, recommending a set of guidelines largely reinforcing existing practices in assessing prices of the world's biggest traded commodity.
"Furthermore, the Commission has concerns that the companies may have prevented others from participating in the price assessment process, with a view to distorting published prices," the Commission added.
It said that even small distortions of assessed prices may have a huge impact on the prices of crude oil, refined oil products and biofuels purchases and sales, potentially harming final consumers.
It said Commission officials were accompanied on Tuesday by their counterparts from the national competition authorities. It added that the fact such inspections had been carried out did not mean the companies were guilty of anti-competitive behavior.
It was not clear whether other companies were included in the investigation.
Statoil said authorities had inspected its office in Stavanger on the request of the European Commission on suspicions of anti-competitive behavior.
Statoil said the suspected violations were related to the Platts market-on-close (MOC) price assessment process, used to report prices in particular for crude oil and refined oil products, and may have been ongoing since 2002.
The Norwegian state, the controlling shareholder of Statoil, said the probe was a matter for the company's management to handle and declined further comment.
Platts said the European Commission had "undertaken a review at its premises in London this morning in relation to the Platts price assessment process".
Thomson Reuters , parent of Reuters news, competes with Platts in providing news and information to the oil market.
(With additional reporting by Barbara Lewis in Brussels; editing by Jane Baird)