U.S. Exports Oil to the World

For the first time since the 1970s, the United States is exporting more oil.

June 19, 2013

ARLINGTON, Va. – For the first time in nearly four decades, the United States is sending more oil away from its shores, Bloomberg News reports. America’s oil surge is the result of technological improvements such as fracking, which has lead to booming production that could overwhelm refineries soon, said Benjamin Salisbury, a senior energy policy analyst at FBR Capital Markets Corp. 

Net petroleum imports have dropped from 60% in 2005 to around 40% of demand today, according to the U.S. Energy Information Administration (EIA). Domestically, production pushed out 766,000 barrels daily, a record amount. “Americans are unbelievably politically sensitive to oil and more specifically to gasoline prices,” said Salisbury. “For politicians to do anything, the pain has to come first. You have to see the rig count fall and then and only then can we have a decision about whether we want to export crude.”

Currently, around 120,000 barrels of crude per daily makes its way to Canada via a U.S. Department of Commerce license. Oil exports need to increase in order to meet demand by a upswing in U.S. production, said Robin West, chairman of PFC Energy. EIA forecasts that U.S. oil output is on track to pass Saudi Arabia as the world’s biggest producer of crude oil within seven years.

“It’s a fairly short period of time, it’s a couple of years, before we effectively hit the wall,” said West during a recent conference. “That will start affecting price, which in turn will start affecting production.” From 2007 until now, the amount of oil imported into the United States has dropped.

However, U.S. citizens may not like the idea of sending U.S. crude oil overseas, given the concern over pump prices, said David Goldwyn, president of Goldwyn Global Strategies LLC. “You’ve got to have an answer which is either it’s going to bring down the price at the pump by a dime if we let this happen or some other positive.”

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