The US Government has decided to loosen regulations on American companies shipping oil abroad. The current ban, which has been in place for 40 years, prohibits all American oil from being sent outside of the country. However, the Obama administration has decided to slightly loosen the restrictions allowing two companies to begin to export. According to the Wall Street Journal:
In separate rulings that haven’t been announced, the Commerce Department gave Pioneer Natural Resources Co. and Enterprise Products Partners LP permission to ship a type of ultralight oil known as condensate to foreign buyers. The buyers could turn the oil into gasoline, jet fuel and diesel.
The shipments could begin as soon as August and are likely to be small, people familiar with the matter said. It isn’t clear how much oil the two companies are allowed to export under the rulings, which were issued since the start of this year. The Commerce Department’s Bureau of Industry and Security approved the moves using a process known as a private ruling.
For now, the rulings apply narrowly to the two companies, which said they sought permission to export processed condensate from south Texas’ Eagle Ford Shale formation. The government’s approval is likely to encourage similar requests from other companies, and the Commerce Department is working on industrywide guidelines that could make it even easier for companies to sell U.S. oil abroad.
Though it has yet to be formally announced, this decision has the potential to have an interesting impact on the energy market. If the ability to export oil is given to more American companies, it could change the role that the US plays in the global oil market. This in turn could lead to a change in prices at the pump for the average American consumer.
Read More- “US Ruling Loosens Four-Decade Ban on Oil Exports” (Christian Berthelsen and Lynn Cook, The Wall Street Journal)