(Bloomberg) -- Continental Resources Inc., the shale explorer founded by billionaire Harold Hamm, told at least one refiner it couldn’t make an oil delivery after the global pandemic sent prices plunging, a move refiners called the “height of hypocrisy” following Hamm’s calls to limit foreign imports.
Oklahoma City-based Continental on Tuesday declared force majeure on at least one of its contracts to deliver oil to a fuel producer, according to a document seen by Bloomberg, a day after crude futures settled at negative $38 a barrel for the first time in history. In the document, Continental said it couldn’t have foreseen the dramatic rout caused by the coronavirus outbreak, and that selling oil at negative prices constitutes waste.
A Continental spokeswoman said the company continues to honor its commitments and is working closely with its purchasers. “Certainly this pandemic has brought about conditions under which force majeure applies,” the company said in an emailed statement.
Hamm has been an active voice in Washington since crude prices suffered the most dramatic collapse in decades. He’s said Saudi Arabia and Russia are guilty of “illegal” dumping and has called on the U.S. to impose tariffs on their crude.
Refiners whose facilities are designed to run on heavier, foreign grades of crude have lobbied against any move to block Saudi imports.
“It is the height of hypocrisy for a company to choose not to honor its contracts to supply domestic crude to refineries while also demanding the administration impose restrictions on foreign crude,” the American Fuel and Petrochemical Manufacturers, a trade group representing refiners, said in an email.
Most recently, Continental filed a complaint with the Chicago Mercantile Exchange over Monday’s price collapse and is seeking an investigation from the Commodity Futures Trading Commission.
The rapid plunge -- with the May contract for West Texas Intermediate falling some $40 in the last 22 minutes of trading -- “strongly raises the suspicion of market manipulation or a flawed new computer model,” the company said Tuesday. CME Group Inc. called Continental’s allegations “factually inaccurate.”
©2020 Bloomberg L.P.