U.S. Economy Would Surge by Lifting the Crude Oil Export Ban
June 25, 2015
Crude oil is one of the most prized commodities and has the potential to give the United States more global leverage. Since the 1973 oil crisis, the United States has been hesitant to utilize this prized resource and is to date the only country in the world that does not allow for the export of crude oil.
In the past decade, falling oil imports and increased product exports have been caused by a lackluster demand for unrestricted petroleum product exports and rapidly rising crude oil production. This coupled with issues of national security have heightened the attention paid to the oil export ban debate.
If the crude oil export ban was lifted tomorrow, U.S. supplies headed to domestic refineries could be rerouted and placed on ships to be exported overseas. This quick reaction would have immediate consequences for the Russian crude market, which supplies most of Eastern Europe's crude needs.
In 2013, Russia received almost four times as much revenue from exports of crude oil and petroleum products as from natural gas. That same year, roughly 33 percent of Russia gross export sales were to Europe.
U.S. crude exports alone will not bring the Russian crude market to its knees. However, bringing U.S. crude exports on line will have a significant impact on the market. A country like Poland, which gets 96 percent of its oil imports from Russia, can narrow the margins on those imports enough to loosen the stranglehold that is currently in place.
One study released by the Brookings Institute stated that lifting the ban could contribute between $600 billion to $1.8 trillion to the U.S. economy and save drivers up to 12 cents a gallon.
Source: Kimberly VanWayhe, "Lifting the Crude Oil Export Ban: How Increased U.S. Exports Will Hurt the Russian Market and Help at Home," American Action Forum, June 24, 2015.
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