Crude oil exportation was banned by law in the USA just 40 years ago.
Aside from a few exceptions like the resources in Alaska and California and oil derived from Canada…
On the other hand, as you know, the strengthening of the global demand and in this context the US production reaching the peak have been effective in the oil price shock that has been experienced since last year. The country that was producing 5.4 million barrels of oil per day in 2009, increased this number to 8.7 million in 2014 and 9.5 million barrels of oil in the first five months of 2015.
From this point of view, where the increasing oil demand would go and whether it would cause a ban of oil exportation or not, has been questioned for a while.
This curiosity gradually increased in the last months. However, the rising voices both from the Congress and the oil companies are becoming more powerful.
For relaxing the bans or lifting them…
Even at this point, the proposal is expected to be voted on at the US House of Representatives this fall. As I say `fall` it may be near, as the following weeks of this September. And then, possible the issue will be in the agenda of the Congress in early 2016. Shortly, there is a little time for the possibility of a new development that would affect global oil markets.
Of course, as it usually happens, whatever the result will be, some fractions will be happy whereas some will be sad. A fraction is defending the “lift the ban” idea in the country; some people's spitting fire shows this.
Is it a meaningless contradiction?
When we look at the present situation of the USA, it is still a net oil exporter…
Compared with the old times, the country got rid of the energy dependence on a large scale, but still money is flown out for foreign oil.
Here, those who oppose the exportation idea use this argument. This group led by refinery owners says “We are a country dependent on the imported oil. As much as we export, we will import. What a meaningless contradiction it is”.
Of course, their main concern is different. If we think with the bad suspicion they introduced themselves, we can say that the key factor is the profit margin. However, since the export ban is valid for the crude oil, it is not for the refined products.
The products as fuel and diesel fuel sold after the refinement of the WTI oil at a discount price, are becoming more expensive in the international markets.
This is closely related with the difference between Brent and WTI. Here, the advantage that American refiners had in the recent years could lose its attraction, if the exportation becomes hard.
However, the Brent-WTI compass could be narrower in this situation.
Well, what do the exportation defenders say?
Their main point is that if the exportation ban is lifted, more oil will be produced in the country and the economy will be revived. It is even claimed that the exportation of the valuable light crude oil would recover the net importation.
Therefore, while various rumors are spreading around, it is important to determine the impact of such a move on the US economy.
Of course, the main factor there will be the United States' production potential and its interaction with the global prices.
The U.S. Energy Information Administration's report
As a result of this necessity, the US government assigned the U.S. Energy Information Administration (EIA) under the US Department of Energy, saying, “You have a look at this issue.”
EIA revealing the report last week that was eagerly anticipated, made the analysis by using various scenarios based on global price developments and the US oil supply.
One of the basic conclusions it reached is answering the most frequently asked question: Lifting the exportation ban does not increase the price of the petroleum products in the country, even it may have a reducing effect.
The factor that makes the main difference in the scenarios the analysis is based on is the level of the US supply in the future…
What is understood from the report is, more noticeable effects could emerge if the supply is high… EIA findings, when seen globally, don't regard the exportation's becoming hard to affect severely the global prices as possible. The possibility of a light downward effect is noted down.
Actually, the stand other producing countries would take will be important at this point. No doubt that, the flow of the US oil into the world will not please some certain countries. How they will react to protect their market shares will be one of the main issues there.
Here, especially at this point, we can say the findings of the report are partially insufficient. In the warning part of the analysis this has already been implied.
Finally, the results of the report which we could consider to be soft, could be effective to promote the issue into an advanced stage to be brought up to the Parliament.
It is necessary to watch the developments closely this fall…