Oil exports might not reduce gasoline prices

Ending the ban on exporting crude oil might not cause domestic gasoline prices to drop, the head of the Energy Information Administration (EIA) said.

EIA is studying the impacts of exporting oil, and the research will focus in part on the relationships between oil and gasoline prices internationally and domestically, EIA Administrator Adam Sieminski said.

{mosads}“Preliminary evidence suggests that gasoline prices get set in global markets,” Sieminski said Sunday on “Platts Energy Week.”

“There’s gasoline imports and exports in very large quantities in the U.S., and global markets seem to dominate that,” he said. “What that suggests is that exports might not have that much of an impact on gasoline prices.”

The comments responded to conclusions from oil industry representatives, lawmakers and others that exporting oil could reduce domestic oil prices dramatically, and would lead to drops in the costs of refined products.

But the export ban, enacted in the 1970s to protect the United States from global oil shortages and price fluctuations, does not apply to gasoline or other refined oil products. Those fuels are therefore traded internationally, and are subject to international forces and prices, Sieminski said.

Sieminski also argued that the United States could successfully export oil while at the same time importing it. Refineries are geared for heavier grades of oil, while much of the oil being produced is lighter.

“So exporting some of the stuff that we don’t need and getting in some of the stuff that we do need might be something that is best for the economy,” he said.