“We understand that both American and world oil prices have fallen dramatically in recent months, but we believe we should vigorously preserve the oil export ban and ensure American oil prices are as low as possible and not pursue policies that will narrow the gap between American oil prices and world oil prices,” senators said in a letter to the Secretary of the US Department of Commerce Penny Pritzker.
The US oil prices were lower than international because of an embargo that prohibited companies to export the commodity. However, in 2014 the Commerce Department corrected the definition of what crude oil was, allowing to trade condensate.
As the result of the Commerce Department decision, “that discount for US crude has been nearly erased”, senator’s letter read.
“The only interests that do not seem to benefit from cheaper American oil are oil companies who want to be able to fetch higher prices for their product on the world market. That is understandable, but basing policy on what is best for oil companies to the detriment of most American businesses, American consumers, American workers, and our national security simply does not make sense,” Menendez and Markey said.
According to the letter, American oil-producing companies are looking to completely lift the export ban, and amendments regarding this matter will head to the Senate floor next week. Menendez and Markey intend to oppose new legislation.
The US Energy Policy and Conservation Act was signed into law in 1975 in response to shortage of global oil supply after the Arab oil embargo. It banned crude oil export with some exceptions, like crude from Alaska or heavy oil from California, and created the Strategic Petroleum Reserve as emergency fuel storage.
