Industry Praises Senate, House Passage of Oil Export Ban Lift, Even as Traders Shrug

With the end of the US oil export ban approaching, traders of physical crude have been scouring the globe and poring over shipping rates to exploit what they hope will be the biggest new arbitrage in years: selling domestic crude abroad.

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The trouble is, they can’t seem to make the math work; and analysts say it could be months if not years before US crude flows to foreign markets in any significant volume.

Reuters reports that most dealers welcomed the likely end to a ban that restricted opportunities in recent years to export relatively inexpensive US crude to higher priced international markets, but now traders in the opaque physical crude market say they cannot find any overseas buyers in the current depressed global price environment.

Still, both metals and oil production industry groups have praised the move and said it will lead to greater prosperity.

“Today, the American people can cheer the House and now the Senate for putting the nation’s energy needs ahead of politics,” said American Petroleum Institute President and CEO Jack Gerard. “This is a historic moment in our energy renaissance. Lifting this ban will help put downward pressure on gas prices, create jobs, grow our economy and lower our trade deficit. We now urge the president to follow Congress’ lead and sign this legislation into law.

“With the administration’s push to allow Iran to export its oil to the global market, it’s time for U.S. producers to have the same opportunity. Our allies around the world are eager to reduce their reliance on energy from less friendly nations.”

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American Institute of Steel Construction President and CEO Thomas J. Gibson took his organization’s support a step further, saying that removing the ban is a step toward stopping government policies that hinder trade.

“The steel products made by our member companies are essential for oil exploration, production, transmission, refining, and distribution,” Gibson said. “Removing this export ban will facilitate greater production of domestic energy resources and should create additional demand for high quality, American-made steel products — in addition to providing opportunities to strengthen the supply chain. Removing the existing US ban on the export of domestic crude oil is consistent with AISI’s long-standing opposition to trade-distorting government policies. Foreign government restrictions on the export of steelmaking raw materials have been used to provide foreign steelmakers with preferential access to raw materials at artificially low prices.”