The global oil glut has hurt U.S. shale drillers, forcing many companies to cut back on expansion and shut down both oil and gas rigs.
Now, in the wake of the nuclear agreement, Iran is close to being cleared of oil sanctions and rejoining the global oil market. U.S. senators are debating whether it is tim
e to lift the ban on our own oil exports.
The face of this change, Senator Lisa Murkowski of Alaska continues to fight for U.S. oil exports. Her argument for this, in the midst of Iran’s return, is that the country should be able to “compete against our foes in a way that doesn’t involve sending our troops in and boots on the ground.”
Essentially, Senator Murkowski is encouraging market competition, or a war over oil.
Opponents of the change want to keep the ban in place for the sake of national security. Senator Bob Menendez argues that the country should “make sure we hold the key to our energy security, rather than exporting it to the world.”
Indeed, those in favor of keeping the ban worry that exporting oil into the global market will raise domestic fuel prices and hurt the refinery businesses that have thrived on the excess oil brought on by the country’s shale boom.
Another recent report stated that many Big Oil companies with assets in both production and refining of oil supplies are pushing for the ban to be lifted; support from refinery-heavy states such as Pennsylvania and Ohio could be the tipping point when the issue goes for a final vote.
Global oil prices are currently the lowest since the Great Recession, and energy experts believe they could drop further when Iran’s supply adds to the glut. U.S. oil companies can only hope to stay alive through exports to overseas countries who use Brent Crude oil prices to value the supplies rather than America’s West Texas Intermediate, which is often lower than Brent.
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Until next time,
Keith Kohl
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