Vitol Said to Plan U.S. Oil Export to Europe after Ban Lift
Now that the 1975 ban on oil exports has been lifted, the first week in January will see a shipment of 600,000 barrels of domestic crude oil transported by tanker in the Houston Ship Channel. Sold to Vitol Group, the oil will most likely be sent to Europe. This will be the first shipment since President Obama signed the bill that repealed broad restrictions against the export of unrefined crude oil. Announcement of this shipment was made only a week after the bill was signed.
Jim Teague, Enterprise Oil's chief operating officer, has announced the company's excitement at shipping "the first export cargo of U.S. crude oil from the Gulf Coast in almost 40 years." He further explains that this action will open new markets for domestic producers of oil, especially producers of light crude oil, diversifying global markets.
The crude oil being exported is said to originate in the Eagle Ford shale region of south Texas, though the details of the shipment aren't officially being made public. Rick Rainey, Enterprise's Houston-based spokesperson reports that Enterprise is providing pipeline and loading services for the cargo.
Reasons for The Original Export Ban
In the early 1970s, OAPEC (Organization of Arab Petroleum Exporting Countries) initiated an oil embargo that resulted in fuel shortages in the United States. In response, the U.S restricted most exports of unrefined crude oil. For a long time, because of rising demand and declining U.S. oil production, the focus was on imports.
About 5 years ago, however, companies like Continental Resources Inc. and ConocoPhillips began increasing oil production from shale rock in Texas and North Dakota. Before long, the U.S. output increased by 65 percent, glutting the market. The surplus of oil in this country forced oil suppliers to sharply lower their prices. Because U.S. companies were allowed to export oil to Canada, they increased shipments there to 500,000 barrels a day, sending more than some members of OPEC.