EIA Supports US Crude Exports

EIA Supports US Crude ExportsEIA Supports US Crude Exports

A long-awaited study by the US President Barack Obama administration concludes that lifting the nation’s four-decade ban on oil exports would not increase US gasoline prices and could even help lower them, raising the stakes in the debate about whether to lift or relax the ban.

The report, issued on Tuesday by the US Energy Information Administration, an analytical division of the Energy Department, stressed that if US oil production remains below 10.6 million barrels per day through the next decade, there would be few differences between leaving the export ban in place versus removing it, OilPrice reported.

If production is set to rise beyond that level, however, removing export restrictions would lead to higher domestic oil production, higher crude exports and slightly lower gasoline prices, but also lower refined product exports.

Digging into the findings, EIA said if the export ban stays in place, it would have the effect of maintaining the current discount at which WTI trades relative to the Brent crude marker.

Moreover, if US oil production increases, the spread between WTI and Brent would only widen, perhaps as high as $10 per barrel under one scenario. And that spread would increase in corresponding fashion the more US oil production increases.