NEW YORK: The US edged closer to lifting its long-standing ban on crude oil exports last week as a bill passed an initial vote in the Senate, but a number of significant political hurdles remain before the law could be changed.
A lifting of the ban would weigh further on an already saturated world oil market, in which competition for market share has intensified in the past year as supply has continued to outstrip demand, especially in Asia, where most of the UAE’s oil exports are sold.
The initiative to lift the ban – which has been in place since the oil price shocks of the 1970s – moved a step forward on Thursday last week as Lisa Murkowski of Alaska won a majority vote in the Senate’s energy committee, which she chairs, to send the Offshore Production and Energising National Security bill for a full vote in the Senate.
The oil export ban is politically contentious in the US, however, where oil prices have been hardest hit as domestic oil production has doubled in the past four years thanks to a technological revolution led by hydraulic fracturing, known as “fracking”, that has unleashed supplies previously locked in impenetrable geological formations such as shale.
The heads of the big US oil companies – most vocally the ConocoPhillips chief executive Ryan Lance – are in favour of lifting the ban so they can get better prices for their oil.
Oil-rich states – including Alaska and Texas, as well as newer oil beneficiaries such as North Dakota – also are in favour of lifting restrictions as the bill includes revenue-sharing provisions for the states.
