Removing crude oil export ban would raise product prices, study finds
Ending the decades-old ban on exporting US-produced crude oil would raise prices by $3/bbl and increase product prices, a study commissioned by Consumers and Refiners United for Domestic Energy (CRUDE) concluded.
This article was update July 28.
Ending the decades-old ban on exporting US-produced crude oil would raise prices by $3/bbl and increase product prices, a study commissioned by Consumers and Refiners United for Domestic Energy (CRUDE) concluded.
The study by Alan Stevens of Stancil & Co. in Irving, Tex., also found that ending the crude export prohibition would make crude and product imports climb and product exports drop; and reduce domestic refinery utilization and possibly shutter some refineries.
“This report is a holistic and thorough analysis of energy markets, which shows that American consumers and businesses will take a major hit if Congress lifts export restrictions,” CRUDE Coalition Executive Director Jay Hauck said on July 27. CRUDE Coalition members include Alon USA, Monroe Energy, PBF Energy, and Philadelphia Energy Solutions.
“This is more evidence that Congress should think long and hard before rushing to change our 40-year-old energy independence law,” Hauck said.
The study also noted that US refining capacity and utilization are at all-time peaks, the Organization of Petroleum Exporting Countries continues to control crude prices indirectly through its members’ production volume limits, and allowing exports would make the US—which still imports 47% of its crude supply—more reliant on less secure foreign sources.
It was released a day before the US Senate Banking Committee’s scheduled hearing on possible impacts of removing the crude export ban. Senate Energy and Natural Resources Committee Chair Lisa Murkowski (R-Alas.), who introduced legislation last week which included a provision to end the crude exports ban, was scheduled to testify (OGJ Online, July 24, 2015).
Contact Nick Snow at nicks@pennwell.com.
