Alan Duncan, the international development minister and a former oil trader, today launched an attack against the European Commission over its decision to investigate price fixing in the oil markets. In an interview with the Financial Times, he called the investigation “illogical and baseless”.
During the interview, Mr Duncan accused the commission of “political posturing”, reflecting wider concern in the oil industry that the market will be undermined. In May this year, the European Commission raided the office of a major commodity price reporter, Platts, and the big oil companies, including BP, Shell, and Statoil, in an attempt to find evidence of price manipulation.
However, Mr Duncan, who worked at Marc Rich, a commodities trader, said, “The idea that you can, would or could benefit from rigging Platts, to me looks utterly illogical and I just don’t see what his is all about.” In a barbing attack, Mr Duncan accused the commission of being ill-informed: “The very fact they are even considering an inquiry suggests they don’t understand what they are dealing with.”
“People who don’t understand the market often want to accuse it of doing things. The modern-world government, the EU Commission, thinks it has got to look into it as soon as someone make an accusation. But just because there is a so-called whistle-blower it doesn’t mean that there’s any basis for it. I just can’t see that there’s any basis for this whatsoever,” Mr Duncan argued.
It is thought Mr Duncan’s comments reflect wider unease among oil companies and traders over fears that the oil market has been unjustly targeted by regulators. Those in the industry suggest that moving the focus to the oil market stems from the investigations into inter-bank lending rates such as Libor. In addition, members of the Conservative Party support Mr Duncan’s comments, with many feeling that the commission has become too political and is overstepping its responsibilities by encroaching further into what they believe should be matters for sovereign governments.