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Ending US oil export ban would not raise gasoline prices: study

Published Tue, Oct 14, 2014 · 04:10 PM
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[Washington] Ending a 40-year old ban on US crude oil exports would not raise domestic gasoline prices because it would put more petroleum onto global markets, where fuel prices are primarily set, a study by The Aspen Institute said on Tuesday.

As the US oil boom of the last six years builds an excess of light crude along the Gulf Coast refining hub, calls have risen for Congress and the Obama administration to relax the ban on shipments to global customers.

The restriction was put in place in the 1970s following the Arab oil embargo. Many politicians have not embraced lifting the ban so far, fearing that they could be punished at the ballot box for any increase in gasoline prices. "Given the public's sensitivity to changes in the price of gasoline, many in Congress are reluctant to support eliminating the ban on crude oil exports," said the policy studies group's report, entitled "Lifting the Crude Oil Export Ban: The Impact on US Manufacturing." "The oil market, however, is worldwide and prices of various grades of oil are set in world markets," it said, adding that producing more US crude oil will put additional downward pressure on global prices.

Lifting the ban would put some, "if modest" downward pressure on US gasoline prices, it said without detailing exactly how much they can be expected to fall.

The report, by the manufacturing branch of Aspen supported by energy companies including Exxon Mobil Corp, Conocophillips and Continental Resources Inc, is the latest to say that gasoline prices would not rise in the face of US exports.

In March, Resources for the Future, a non-profit energy and environment research group, concluded that U.S. gasoline prices would fall by about 3 to 7 cents a gallon.

But RFF report also concluded there would be also be losers: a rise in carbon emissions linked to climate change could result, it said.

In September, a Brookings Institution report said gasoline prices could fall 7 to 12 cents per gallon, if the ban were lifted.

Despite increasing support this year for lifting the ban by analysts and some lawmakers, including Republican U.S. Senator Lisa Murkowski from Alaska, Americans still fear gasoline prices would spike, a Reuters-IPSOS poll found this month. REUTERS

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