European Commission investigators raided the offices of oil companies BP, Royal Dutch Shell and Statoil as well as data collector Platts as part of a larger inquiry into price manipulation of the global crude market.
The unannounced inspections were carried out because of concerns 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, according to the European Commission.
The inspections, which occurred at oil companies’ offices throughout Europe, are a preliminary step to investigate anti-competitive practices, the EC says.
The EC says the inspections are not an indication of guilt and the investigation is expected to last months. However, UK Prime Minister David Cameron says oil executives could face jail if they did keep prices high by rigging the market, the Independent reports.
The price paid for oil, fuel and related products around the world is determined by a handful of benchmarks. Price-reporting agencies, such as, Platts and Argus Media, gather transaction data from oil companies, banks and hedge funds to calculate the benchmark price.
Investigators are focused, in part, on the price reporting system for oil and other petroleum products, the New York Times reports. Companies like Platts determine benchmark prices by polling traders and using other industry data.
Platts also has developed an electronic window, where a significant amount of oil is traded, which has raised concerns that companies could distort prices through a flurry of last-minute trades, according to the NYT.
The probe marks the third time global pricing benchmarks have drawn regulator scrutiny in the past year following investigations into bank manipulation of the London interbank offer rate, or Libor, and the benchmark for the swaps market ISDAFix, Bloomberg reports.