Thanks to technical innovation and cheap financing for exploration, US crude oil production has increased from 5 million barrels per day (b/d) in late 2006 to 9 million b/d in late 2014. The nation’s total petroleum production is now more than 12 million b/d, making the US the largest liquids supplier in the world. Now, the growing mismatch between domestic crude supply and domestic refining capacity is prompting a re-evaluation of existing export restrictions and there are moves in Washington to relax them altogether.
The implications of eliminating the export ban for the oil markets and the American economy were captured in a 2015 paper published by two Columbia University researchers. Their predictions? Dropping export restrictions would increase crude production, lower prices for domestic consumers of both gasoline and diesel fuel, and reduce revenues for refiners due to lower volumes. One bonus: Increased US crude production would likely weaken the economic power, fiscal strength and geopolitical influence of certain other large oil-producing countries, including Russia, Venezuela and Iran.