US eases oil export restrictions
- 26 June 2014
- From the section Business
The US has given permission to two firms to export oil, after it has been lightly processed - a move that could see oil exports from the US increase.
Exports of unrefined crude oil produced in the US have been mostly banned for nearly four decades.
But there have been calls to ease that ban, not least due to rising oil production and a shale oil boom.
However, the White House said the move by the Commerce Department did not indicate a change in policy.
"As the Commerce Department has said, oil that goes through a process to become a petroleum product is no longer considered crude oil," spokesman Josh Earnest said.
The US Commerce Department, which controls oil exports, has given permission to Pioneer Natural Resources Co and Enterprise Products Partners to ship a type of ultra-light oil to foreign buyers.
The US has restricted most crude exports since mid-1970s, in response to the Arab oil embargo.
While there have been calls for the restrictions to be eased, some have cited concerns that any such move may see fuel prices in the US rise and hurt domestic businesses and consumers.
However, some analysts said that the latest decision was unlikely to have an impact on domestic fuel prices.
"It's not credible to say that if we export more condensates that would cause a spike in prices at the pump,'' said Eric Lee, a commodity strategist with Citibank.
Meanwhile, analysts also suggested that the ruling could see other firms take a similar route of processing oil in order to make it eligible for exports.
Such moves, they said, could see US oil exports increase in the short term.
"The flood gates of exports will be opened now," said, Ed Morse an oil analyst with Citigroup.
He added that some 200,000 to 300,000 barrels per day of US condensate could be exported by the end of this year and the volume could double in 2015.