by Shahnaz Shipxpress.com
U.S. crude oil exports have been steadily rising since 2013 and reached its highest level in 15 years last August with exported crude averaging at 396,000 bpd as of June 2014. The increase in exports is a direct result of the increase in production in the US, specifically from booming productions from the Bakken, Eagle Ford and the Permian Basin. Currently the Commerce Department must approve all the export of crude oil and is more likely to grant exports to Canada, which is where a majority of the exports were sent to, than other international destinations.
The limitations on exports have ruffled the feathers of oil producers who began lobbying the capital, urging them to remove the decade-old oil ban which restricts the export of most crude oil. Producers are saying that lifting the ban during the explosion of the U.S. oil output would support the domestic production boost while creating career opportunities for hundreds of thousands of people.
Though the United States has undoubtedly come across a production boom, truth remains that consumption is still far higher than production, leaving the U.S. to continue to be heavily dependent on international imports. Even so, producers fight back that much of the crude being produced includes types of oils that are low in demand locally, making it more sensible to export them for more profitable ventures.
There are many who oppose lifting the ban as well; refiners, who process crude to make gasoline and other products, reap benefits from having low cost domestic crude being “stranded” in the US and have made claims that ending the ban would raise the already-growing gasoline prices in direct reflection of not being able to secure the nation’s production.
Despite the restrictions, companies have found a loophole to export oil from the US and can continue to do so without any changes made to the current policies; certain light oils which become distilled turn in to ‘processed condensate’ and are then considered a petroleum product, making it eligible for exportation without restriction. Ed Morse, Head of Commodities Research at Citigroup made a statement claiming that without changing the current laws and policies, the U.S. could potentially export over a million barrels.
Article was written based on information from the following: Times Colonist and Houston Business Journal.