U.S. Won’t Allow Crude Exports Within the Next Decade

The U.S. won’t allow companies to export domestic crude oil within the next 10 years, according to more than 60 percent of those polled at a Bloomberg Oil Forum.

Thirty-four out of 82 traders, analysts and energy professionals attending the forum in London, or 41 percent, said the U.S. would never allow exports, while 22 percent said only after 2023. The U.S. will condone exports within the next five years, according to 13 percent of those polled, while the remaining 23 percent suggested sometime between 2018 and 2023.

“This question of the U.S. exporting crude runs so much against the grain of everything that comes out of Washington: energy independence, domestic oil and propping up U.S. self- sufficiency,” Sadad al-Husseini, the founder of Husseini Energy, an independent consultant in Dhahran, Saudi Arabia, said at the forum in London today.

Technological improvements in hydraulic fracturing and horizontal drilling have unlocked new resources in the U.S. and the nation will probably become the world’s largest oil producer by about 2020, according to a November annual report by the International Energy Agency. Such abundance raises the possibility that the U.S. will rescind its decades-old policy of banning crude exports, the IEA said.

A U.S. decision on whether to allow oil exports would be “very helpful,” amid constraints on spare production capacity elsewhere, IEA Executive Director Maria van der Hoeven said at a conference in Paris on April 4, adding that the decision is one for the U.S. alone.

BP Plc (BP/)’s Chief Economist, Christof Ruehl, said in an interview in London on Feb. 18 that, from a market perspective, allowing U.S. crude exports would be the “best thing.”

Exports Unlikely

“I can’t see how politicians would make a 180-degree turn even within the next few years,” Husseini, who retired from Saudi Arabian Oil Co. in 2004, said today.

David Fyfe, the head of market research and analysis at Gunvor Group Ltd., said at the London forum today that such a move would be a “difficult political hurdle” to overcome.

“I think it is a difficult ask, although I think industrial reality and refining economics would suggest that it should allow it,” said Fyfe, who was formerly the head of the IEA’s oil industry and markets division.

“Politically, I don’t see it happening under this current administration,” said Christian O’Neill, senior energy analyst at Bloomberg Industries.

Just a few years ago, few analysts predicted that the U.S. would now be on the verge of having enough natural gas to make exports viable, said Seth Kleinman, head of energy strategy at Citigroup Inc.

To contact the reporters on this story: Stephen Voss in London at sev@bloomberg.net; Lananh Nguyen in London at lnguyen35@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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