In a major development, the Federal Trade Commission (FTC) has accused former Pioneer Natural Resources CEO, Scott Sheffield, of colluding with OPEC to raise oil prices. The FTC has filed a complaint against Sheffield and has barred him from serving on the Exxon Mobil board of directors once the planned $65 billion acquisition of Pioneer closes.

The complaint alleges that Sheffield engaged in private conversations with high-ranking OPEC representatives to ensure that Pioneer and other competitors in the Permian Basin would keep oil output artificially low. This, in turn, would help increase prices at the pump and inflate Pioneer's profits, according to the FTC.

The FTC considers Sheffield's actions a sustained and long-running strategy to coordinate output reductions, rather than a one-off event. In response to the allegations, the federal regulator has decided to refer the matter to the Justice Department for a potential criminal investigation, sources familiar with the situation informed The Wall Street Journal.

Exxon Mobil, on the other hand, has agreed to keep Sheffield off its board and fully supports the FTC's decision. The oil major stated that it expects its acquisition of Pioneer to be finalized on Friday.

In a statement, Pioneer Natural Resources pushed back against the allegations, asserting that the FTC's complaint reflects a fundamental misunderstanding of the U.S. and global oil markets. Pioneer contends that Sheffield never intended to undermine market competition and abide by all laws and principles that protect fair competition.

Despite the accusations, Pioneer and Sheffield have announced that they will not take any measures to prevent the merger with Exxon from closing.

The FTC's decision to refer the allegations to the Justice Department for a potential criminal investigation highlights the seriousness with which the regulator views potential criminal behavior. The FTC spokesperson, Doug Farrar, emphasized the agency's commitment to fulfilling its responsibility in referring such matters.

As the case continues to unfold, it remains to be seen what further actions may be taken against Sheffield and the potential impact it might have on the Exxon Mobil-Pioneer merger.