State congressmen praise decision to lift oil export ban to Mexico

But Republicans have said those days are long gone, arguing that lifting the ban could make the U.S.an energy superpower and boost the economy, while simultaneously decreasing OPEC’s influence on the market.

The U.S. Commerce Department says it intends to approve an application for a crude oil swap between the U.S. and Mexico.

The decision is going to benefit Mexico, which generates heavy crude but has its refineries designed to process the lighter version of the fuel.

However, some energy economists, the Congressional Budget Office, and the U.S. Energy Department have reportedly suggested that exporting U.S. crude will help bring down global oil prices by increasing supplies to the world market.

Bloomberg cited Pemex as saying: “With light crude coming from the US, the country will benefit given that Pemex will mix light and heavy crudes which will result in a greater production of gasolines and diesel”.

Laws enacted in response to the 1970s oil embargo by Arab members of the Group of Petroleum Exporting Nations bans the export of unprocessed crude oil, however merchandise like gasoline and different gasoline merchandise aren’t restricted. Consequently, swapping U.S. light crude oil for imported heavy crude would allow the product to be more efficiently processed in current market conditions.

Many of Senator Heitkamp’s fellow democrats fear that oil prices would increase if the U.S. exports its reserves.

Meanwhile, the US can legally export to Canada, the only country to whom export rules do not apply.

“Oil is the one commodity in North Dakota that faces these types of export restrictions, and it is previous time for that to vary”, she stated in a press release.

Legislation to lift the crude export ban entirely is advancing in Congress although it is unclear whether the sufficient votes now exist, especially in the Senate, to send such a measure to the President for signature. Barton’s comments follow a separate statement by House Speaker John Boehner (R-OH) expressing his support for lifting the 40-year ban.

It wasn’t a resounding victory as the Committee on Energy and Natural Resource stayed along party lines in a 12 to 10 vote last month, but the bill is moving ahead to the Senate floor.

The Mexican deal is welcome, but incremental steps like it won’t let the United States realize the broad benefits noted above.

These recent developments demonstrate that further opportunities exist for companies to export crude oil from the United States. However, obtaining a license for these transactions will require carefully structuring the transaction to meet the requisite regulatory framework while remaining commercially viable.