What will change after the Americans cancel the ban on oil exports?

The leaders of the Republicans and Democrats in the US Congress agreed to lift the ban on oil exports that had been in effect for 40 years. Theoretically, this means that a very strong player will once again enter the world oil market, but in practice little will change. In any case, world oil prices are not likely to fall much.

The following is a list of why the news from the US Congress is both important and passing.

The USA is one of the great oil powers. In Russia, it is considered that the main oil-producing countries in the world are Russia itself and the states of the Middle East. This is not true. It was in the United States that industrial oil production began (by 1910, in California alone, 22% of world oil was produced), and since then this industry has been actively developing. True, with 1975, the United States stopped selling oil abroad, responding to the energy crisis caused by the failure of OPEC countries to supply raw materials to the Americans and their allies. However, production in the United States remained substantial, and after the start of the shale revolution (August 2008 of the year) increased by 90%. According to the results of 2014, the USA became the largest oil producer in the world, if counted in barrels, and not in tons.

The oil market is one of the most “not free” in the USA. The US economy is known for minimal restrictions on the freedom of competition, but the oil market is historically highly regulated. At various periods, the state directly pointed out who should supply hydrocarbons, and who should not, which fields to develop, and which - not, in which places to build oil pipelines, and in which - not. The export ban is from the same series, and liberal economists have repeatedly advocated its abolition. The owners of oil refineries were against, fearing a rise in prices for local oil due to increased demand.

The United States and so export oil, just about this little written. The restriction does not apply, for example, to exports to Canada, and this is 400 thousand barrels per day, that is, almost as much as Libya produces. Most recently, part of the restrictions was lifted for Mexico, and in general, any American company can ask for the export of oil to a particular country, if it is in the "national interest". Gasoline and other petroleum products are exported and completely free; however, the graph of the US Department of Energy shows that the main customers of American refineries are in America; hydrocarbons practically do not reach Europe and Asia. In other words, one should not think that American oil will force Russia out of its main markets.

World oil prices from the lifting of the ban will not change much. The simple market logic “supply has increased - prices have fallen” here works with restrictions: the same US Department of Energy has already written about this several times. The fact is that now in the world two main oil grades are traded - WTI and Brent. Prices will rise on WTI (its offer in the USA will decrease), and on Brent it will fall (consumers around the world will switch to WTI). True, another restriction comes into force: if the prices for WTI increase, and for Brent fall, the difference between them decreases. This is disadvantageous to WTI exporters; American oil should be at least a few dollars cheaper than European in order to recoup the transportation and other export costs (they now cost about the same).

For reference: the calculation of prices for the Russian Urals is taking place with reference to Brent, so for Russia this is not too good news.

Why is the decision of congressmen all the same important? First, purely psychologically. In the oil market, one bad news is replaced by another - OPEC does not restrict production, storage tanks are not enough, Iran, after lifting sanctions, is going to flood the market with cheap oil, and then the United States with their decision to start exporting.

Secondly, tactically. Unlike gas (which the United States, by the way, will begin supplying to Lithuania already next year), it is much cheaper to arrange for the export of oil - it is not necessary to build gas liquefaction plants and specialized tankers; it is only necessary to adjust the oil loading where before that oil was pumped out of the tankers. Consequently, if some kind of energy crisis happens in the world, it will not be as acute as before - if something happens, the deficit will be at least partially compensated by the United States.

Thirdly, strategically. No matter how huge the US market is, many investors stayed away from oil due to limited outlets. Now there will be no such problem - and this means that the sector can expect both investments and the innovations that follow them.

Earlier, Forum wrote that the appearance of “overseas” gas on the territory of the former USSR means that Gazprom will have a hard time: its influence on the region will decrease, and Russia will no longer be able to use gas as a political weapon. We told you how it happened.