The Strategist

The United States Will be Among the Largest Oil Suppliers if the Ban on Exports is Lifted

05/06/2015 - 15:38

In the case of lifting the ban on oil exports, the United States would become the fourth largest supplier of oil, second only to Saudi Arabia, Russia and the UAE.
US can become one of the largest oil exporters in the world in case of cancellation of the ban on foreign supplies of fuel introduced in 1975, Bloomberg reported, citing a study conducted by Turner, Mason & Co. ordered by the US Department of Energy.

The country will be able to export up to 2.4 million barrels per day by 2025, the study said. This will allow it to enter the fourth place among the largest suppliers of oil in the world market, second only to Saudi Arabia, Russia and the UAE.

However, this study does not take into account possible changes in the rate of production after the abolition of the ban on exports, as well as competition in the global market.

- We are already the leading supplier of refined petroleum products. In view of the change in the situation in recent years, against the background of the development of production in shale deposits and in deep water, the US has all the prerequisites to become the largest exporter of oil,- said John Turner, Mason Auers’ analyst.

Over the past 4 years, oil production in the country increased by 71%.

According to the head of the Office of Energy Information at the Ministry of Energy (EIA) Adam Seminsky, if the ban on the export of oil will be removed now, the United States would be able to start exporting from 1 million to 1.5 million barrels per day.
Earlier, Lisa Murkowski, the Senator of Alaska, announced the region’s plans to submit to the Congress a bill suggesting the abolition of the embargo on foreign oil supplies later this year. In the case of the ban’s lifting, the price of gasoline in the US very likely will decrease, what would be a positive factor for the population, but would hit the interests of the local refineries at the time.
US restricted the sale of crude oil abroad for 70 years after the Arab countries had introduced the oil embargo in response to US support for Israel and their allies. Since that, the american companies can export only refined oil products, not raw. In recent years, the calls in US for the lifting of the ban on the background shale revolution have become more frequent.

In 2014, the US government for the first time since the 70-ies of the last century allowed companies to export condensate (a type of ultra-light crude oil). US Department of Commerce without any official announcement in June granted the appropriate permissions to Pioneer Natural Resources and Enterprise Products Partners companies.

In March of this year, Bloomberg reported, citing informed sources, that the top managers of the largest oil companies in the US held a meeting with representatives of the White House and lawmakers, trying to convince the authorities to lift the ban on the export of oil from the country.