Warning to companies over manipulating oil prices

Oil companies will face the full force of the law if they manipulate prices, Britain’s energy minister said as the European Commission demanded that more firms provide information as part of its probe into oil pricing.

Eni said it was asked by the Commission to provide information. The Italian company’s statement came a day after the offices of Shell, BP and Statoil were raided by investigators over suspected oil price manipulation.

The surprise searches of major oil companies, but not their competitors the powerful privately-owned trading companies, were one of the biggest cross-border probes since the Libor scandal and sent shock waves through the secretive industry.

Authorities have sharpened scrutiny of financial benchmarks around the world since slapping large fines on some of the world’s biggest banks for rigging interest rate benchmarks.

“If it turns out to be the case that hard-pressed motorists and consumers have been hit in the pocket by manipulation in the market, the full force of the law should be down upon them. There is no doubt about that,” Britain’s Energy Secretary Ed Davey told parliament.

A spokesman for Prime Minister David Cameron said he expected companies to fully comply with the investigation.

London is home to some of the biggest trading desks in the oil business.

The Commission has said it had concerns that companies may have colluded in reporting distorted prices to a price reporting agency to manipulate prices for oil and biofuel products.

It also said companies may have prevented others from participating in the price assessment process of a pricing agency, which it did not name.

Platts, the world’s largest pricing agency and a unit of US McGraw Hill, is cooperating with the probe. On Wednesday, Antoine Colombani, the Commission’s spokesman on competition policy, said only one pricing agency was involved in the probe.