ForexMinute had earlier reported last month that in its statement the International Energy Agency (IEA) said that exceeding even the most bullish of expectations, a surge in the U.S. oil production was seen last year; however, if the restrictions on the exports are not lifted, surging U.S. oil production could hit a wall in the coming years.
Now, a debate is coming out whether the U.S. should export or not export oil. The question was raised in the Senate Energy and Natural Resources Committee meeting where according to analysts and business leaders from both sides of the debate presented the pros and cons of lifting the decades-long ban on exports of domestic crude.
According to some analysts it is though a big question but it has to be taken whether or not to lift that ban, particularly, when exploding supplies of American crude oil is leading to lower oil prices and losses for the oil producers. Earlier, the IEA had warned that surging U.S. oil production has surged in recent years thanks to shale oil production.
The agency had then said that the last year, the US’ oil production rose 15% which is the fastest absolute annual growth in any country in two decades. Additionally, it came out that relentless oil production may cause several unwelcome eventualities. Now the voices are coming up against restrictions on the oil exports.
U.S. Oil Refineries Want to Explore Global Market amidst Low Domestic Demand
Those who support that ban should be lifted claim that the U.S. is producing oil at levels not seen in decades; however, due to restrictions on export the oil companies that have invested a lot are losing as they are unable to get profits which they could otherwise get if they exported. The U.S. oil refineries spent tens of billions to optimize their plants; slow crude market is hitting them bad.
The restriction on oil exports and low earnings may further discourage them to invest in exploration and production as after already sinking so much capital to optimize their plants for heavy crude, they can’t invest further. Also, the kind of oil these refineries are producing has lower demand in the U.S.; opening up the global market for them can help them.
Thus, according to oil refineries with less demand for their products at home, the U.S. shale oil can be made available for global demand. It will help not just the U.S. refineries but the global customers at large as well.
To contact the reporter of this story: Jonathan Millet at firstname.lastname@example.org