Near the end of Truman's term in office the Justice Department instituted an antitrust suit against the multinational oil corporations operating in the Middle East. Both Truman and subsequently the Eisenhower administration sharply cut back the suit. The government charged the five major U.S. oil corporations—Exxon, Mobil, Socal, Texaco, and Gulf Oil—along with two alleged coconspirators, Royal Dutch Shell and British Petroleum, with criminal violation of the nation's antitrust laws by having engaged in a worldwide combination to restrain and monopolize U.S. domestic and foreign commerce in crude oil and petroleum products. The suit sought relief through divestiture of the defendants' joint production, refining, pipeline, and marketing operations.
The oil cartel was one of a series of cases that the Justice Department brought against industries after the war believed to have collaborated with enemy powers before the conflict. In the short term, the cases were disruptive to a number of multinational corporations that had made major investments overseas before the war and may even have discouraged them from engaging in international business after the conflict; certainly this was the case with General Electric (GE), which had suffered losses during the war and had to fight a suit accusing it and its subsidiary, International General Electric, of having maintained a cartel in lamps and electric equipment. Eventually GE sold off a major part of its foreign holdings.
By the end of Truman's administration, however, the White House had begun to rethink its foreign antitrust policies. This was most apparent in the oil cartel case. In 1951 Iran nationalized British Petroleum's Iranian holdings. BP responded with a highly successful worldwide embargo of Iranian oil, which led to serious European oil shortages. For reasons of national security having to do with needing the same oil companies against which it had brought a criminal antitrust action to meet these shortages, President Truman had the criminal charges reduced to much less punitive civil actions. He did this over strong objections from Justice Department and Federal Trade Commission officials, who maintained that the agreement constituted a waiver of the antitrust laws as applied to the foreign cartel arrangements of the oil majors.
President Eisenhower believed that enforcement of the antitrust laws should not interfere with programs and policies deemed important or essential to the national interest, such as the promotion of trade and private investment overseas. Accordingly, he later ordered the oil cartel case confined strictly to firms headquartered in the United States and then pressured the Justice Department to grant a newly formed Iranian oil consortium (consisting of BP, Royal Dutch Shell, the five American majors, and a number of smaller independents) a waiver in the exploration and refining of Iranian oil. Since it was nearly impossible to prosecute the very actions it had encouraged and sanctioned on the grounds of national security, the antitrust case was now effectively reduced to just the marketing and price-fixing of oil. Although the case was to drag through the courts until 1968, its final outcome left intact the scaffolding of the cartel arrangements among the oil majors. The decrees obtained were limited to price-fixing and marketing arrangements only.