WASHINGTON: On Tuesday, US Energy Information Administration (EIA) chief Adam Sieminski told Sputnik that current market conditions are not conducive for US crude exports to Europe. Earlier in January, the United States sent its first shipments of light crude oil to Europe just weeks after Washington lifted its ban on oil exports.
US energy products will primarily be consumed domestically or in nearby markets like Canada, Colgan, who is author of “Petro-Aggression: When Oil Causes War,” added. Ball State University Professor of Economics Cecil Bohanon told Sputnik that lifting the US oil export ban will affect global energy prices, but not necessarily exports to Europe.
Oil is a globally traded commodity subject to an international price, Bohanon continued, which connects all the markets independent of the specific buyer-supplier relationships. US lawmakers have suggested increasing energy exports to Europe to offset some countries’ dependence on Russian energy supplies. Calls for increasing energy exports also come amid a bleak outlook for US producers.
Oil Price Information Service Global Head of Energy Analysis Tom Kloza told Sputnik that the global competitiveness of North American oil producers has been hurt by oversupply and plunging oil prices. “Ultimately, they [US suppliers] will be in better shape and see higher profits when the recovery cycle begins, and they’ll be competitive with many other world producers,” Kloza claimed.
If an increase in US energy exports puts downward pressure on global oil prices, it raises questions on how major oil producers like Saudi Arabia will react to the glut of supply. In response to an Arab oil embargo earlier in the decade, the US banned oil shipments to destinations outside of North America. Recent increases in oil production have produced a glut in parts of the United States, increasing pressure to end the ban.
