Tankers from Texas

22 May 2015: U.S. exports are already happening.  The rapid growth in tight oil production has created an abundance of light sweet crude in the United States. However, prior to the tight oil boom, U.S. refiners invested many billions of dollars in upgrading capacity to be able to process the cheaper, heavier grades from Latin America and Canada, so they are not the ideal customers for the domestic crude. Under the best case scenario, U.S. refiners would continue to import the heavier grades and shale producers can export the lighter grades to the countries and customers that have a need for it: refiners in Europe and Asia. As we all know by now, the U.S. crude oil export ban, which dates back to the 1970s, prevents this optimization to take place and U.S. producers are forced to sell their crude to domestic refiners at a discount to what these grades may fetch on the international markets. Since last year, the pressure to overturn the export ban has increased. Just last Tuesday, a bipartisan group of senators introduced legislation to lift the ban citing various economic and geopolitical benefits. However, is the official lifting of the ban really necessary or has the industry already found ways around it? Download here