Spark Global Limited reports
Nearly a dozen U.S. Congressional Democrats are urging President Joe Biden not only to combat high oil prices by releasing the Strategic Petroleum Reserve, but also to ban U.S. oil exports, according to a letter seen by foreign media.
Rep. Ro Khanna, D-Calif., said he was told the White House was considering a ban on U.S. crude oil exports. Khanna, who chairs the House Oversight and Reform Committee’s environmental subcommittee, has been urging the White House to lower prices by banning U.S. crude oil exports.
Khanna reportedly drafted a letter to the White House on Monday that was signed by a number of Democrats. In the letter, they urged the U.S. government to block oil exports. The letter reads:
“We must use every tool at our disposal to bring down gas prices in the short term…… A ban on US oil exports would increase domestic supply and put downward pressure on prices for American households.”
Some industry analysts and economists say a U.S. ban on crude exports could backfire because U.S. refineries can only process crude produced in U.S. shale basins, and keeping supplies at home could cause prices of some types of crude to plummet while gasoline prices remain high.
Goldman Sachs also told clients last month that an export ban could be “counterproductive” and could send retail fuel prices even higher.
Even Mark Zandi, an economist frequently cited by the White House, has questioned the effectiveness of the oil export ban. Zandi, chief economist at Moody’s Analytics, said:
“I am not in favor of banning oil exports. “I don’t think it’s going to bring down the price of gasoline much, because gasoline prices are largely determined by global oil prices, not by the price of oil produced here in the United States.”
But Khanna disagrees. He said:
“The economics of it [banning oil exports] are logical. Increasing the supply of domestic products is bad for Americans, and that’s just crazy.”
Khanna also said U.S. refineries could be reconfigured. Connor said.
“We’ve heard it’s under consideration and it’s worth sending. They have told me and they have told some of my colleagues that they are considering [banning oil exports].”
The White House did not immediately respond Monday night to a request for comment on Mr. Khanna’s comments.
Congress only lifted a 40-year ban on oil exports in 2015, giving the US a much bigger role in international energy markets. Since then, U.S. exports have regularly exceeded 3 million barrels a day, outpacing production by major Opec members such as Kuwait and Iran.
The letter highlights the growing pressure on the White House from its own party to reduce gas prices. Democrats called it an “urgent issue” and asked Biden to ensure “affordable and reliable energy for American families.”
Media reports had said Biden would announce as early as Tuesday a joint effort with other countries to release oil reserves to curb prices.
But even supporters of releasing the reserves admit it is not a long-term solution, more of a stopgap measure because the strategic petroleum reserve is limited. With the economy recovering and weak supplies from Opec, the US and other major producers, releasing oil reserves will not address the potential supply-demand imbalance caused by surging demand. Connor said:
“This [release of stocks] is not a panacea, we have to do everything we can.”
Reprint indicated source：Spark Global Limited information