Independent Refiners Gained from US Crude Oil Export Ban

The White House said in the past it would veto any legislative efforts to erase the ban, arguing concessions for limited exports of crude oil and refined products dubbed condensate were already approved by the Commerce Department.

Oil producers, rig owners, drill-bit manufacturers and oilfield service providers around the world have been canceling exploration projects, reducing budgets and firing hundreds of thousands of workers to cope with the worst price slump in a generation.

“I think in the long-term, it should mean better prices for Wyoming operators”, he said.

Democratic Leader Nancy Pelosi said her party lawmakers agreed to lift the ban on oil export as a compromise with the Republicans. “It will keep the price of gasoline lower at the pump for consumers because of more supply, and it will bolster national security through energy security”, said Hoeven, who has been working to get the ban lifted. “Lifting the ban on domestic crude oil exports will result in a United States dollars 30 billion windfall each year to oil producers, and put our domestic oil refiners at an economic disadvantage with their foreign competitors who enjoy lax environmental rules and regulations”, Carper said.

Although it should not disrupt the world’s oil markets given that the U.S. has become the world’s largest oil producer for more than a year, the decision confirmed that the real battle is being fought on market shares rather than on prices.

“Lifting the ban on crude oil exports is a triple win – it will create jobs and grow our economy”. As an exporting country, the USA would not sit on the sideline as other nations set policies that affect the global market.

This provision further states that “no official of the Federal Government shall impose or enforce any restriction on the export of crude oil”. In terms of oil prices, USA crude oil will likely spike briefly once the legislation enters into force, but will settle down and continue to trade lower than the global benchmark Brent because of transport costs and infrastructure constraints.

Tom O’Malley, executive chairman of refiner PBF Energy (PBF.N), said lifting the ban would lead at least one East Coast refinery to shut down, adding that his refineries in New Jersey and DE are less exposed.

Lifting the ban on crude exports comes with the passing of the 2016 “Omnibus” spending bill. Some 491,000 barrels per day of crude were allowed to be exported from Alaska and California to Canada for domestic use, and imported crude could be re-exported.

USA oil explorers from Exxon Mobil to Continental Resources have been agitating for an end to the export ban for most of this decade as technological advances in drilling and fracking opened up vast, untapped reserves of crude. Martin Heinrich’s office, the deal that lifts the ban on oil exports includes a five-year retroactive extension of the Production Tax Credit through 2019, which supports wind energy, and a five-year extension of the Solar Investment Tax Credit.