There are a number of bills currently active in Congress aimed at lifting the almost 40-year-old ban on U.S. oil exports. Some policymakers claim the ban is outdated, given advancements in extraction technologies and an oversupplied global market for crude.
Earlier this month, the Energy Information Administration (EIA) released an in-depth analysis on the potential effects of either lifting or maintaining the current ban. Like some previous industry reports, the EIA’s report indicated the price of gasoline and other petroleum products would likely remain unchanged, or would fall slightly for U.S. consumers as a result of lifting the ban. For this reason, the report is being blazoned by those who support repealing the ban.
Additionally, the EIA predicted that the spread between West Texas Intermediate (WTI) and Brent oil benchmarks would likely shrink if the ban were to be removed, in turn decreasing financial margins of U.S.-based refiners.
Lifting the ban would play favorably to oil producers on U.S. soil, allowing access to global crude oil markets and creating the ability to capitalize on future global supply disruptions. One bill, HR 156, contains language that would give the President the authority to reinstate the ban for up to 90 days during periods of national emergency. However, HR 702, has thus far gained more traction in the House, and contains no such language.
A bill repealing the ban is expected to be voted upon by the House General Assembly this fall, whereupon passing, it would move to the Senate. Some media outlets speculate a bill may be on the President’s desk by the end of year.
The EIA’s full report is available online.
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