Tuesday, February 16, 2016

The United States lifts 40 Years Oil Export Ban and US Companies Immediately Start Competing For Latin American and Caribbean Crude Oil Supply Contracts

ICMS, Inc Reports

By Tom Okure,Ph.D Date: February 16, 2016
The US lifts its oil export ban and plans to become a major crude oil competitor in the global oil market.
Late last year President Obama signed a bill into law which lifted a 40 year oil export ban on oil exportation by the United States (US).  The lifting of the ban was praised by the head of Producers for American Crude Oil Exports, George Baker, who stated that "Now that we have levelled the playing field, the United States finally has an opportunity to compete and realize our nation's full potential as a global energy superpower." 

Picture of Oil Tanker
Analyst at the time indicated that lifting the ban was not expected to lead to any large US oil exports for months or even years due to the current global oil glut in the market.  Because of opposition to the lifting of the ban by opponents who asserted that the lifting of the ban would lead to the loss of oil refining jobs and would be bad for the environment, the legislation included a trade-off in the enabling legislation which included tax breaks as incentives for the development of solar and wind power and a pledge by Republicans not to block a $500m payment to the UN Green Climate Fund.

Today, this milestone legislation is quickly changing the dynamics in the global world oil export market as US companies are realigning themselves to begin exporting crude oil and competing for market share in the global oil market.  In fact, on New Year’s Eve the first US oil export tanker left the port of Corpus Christi, Texas headed with a shipment of crude oil for Europe.

There are also new developments indicating that US companies are now competing head to head against struggling oil exporting African countries like Nigeria and Angola in Latin America and the Caribbean countries for lucrative supply contracts to provide light sweet crude oil which many Latin American countries need to blend with their heavy soar crude oil which is difficult and expensive to refine into gasoline.  When prices are right US companies still plan to buy from Nigeria and Angola.

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