Advocates urge US to end its crude export ban in Iran agreement’s wake

Advocates called for removing the US ban on exports of domestically produced crude oil in the wake of the July 14 international nuclear weapons agreement with Iran that also would lift sanctions on that country’s crude sales.

“Once [the Iran] sanctions are removed, the US will be the only major oil producing country in the world that has restrictions on the export of domestically produced crude oil,” noted George Baker, executive director of Producers for American Crude Exports (PACE).

“The consequences of this voluntary, self-imposed restriction places American companies at a significant competitive disadvantage and threatens workers, government revenues, and the US relationship with our international trading partners,” Baker said.

Supporters of ending a 40-year-old policy imposed following the 1973 Arab oil embargo and global supply interruption cited recent media reports indicating that Iran intends to double its crude exports soon after sanctions are lifted. This would mean about 1 million b/d of crude hitting global markets, they said.

“As soon as Iran is permitted to export its surplus oil on the world market, why can’t we allow our own companies to do the same with their American-made surplus of crude oil?” asked Independent Petroleum Association of America Pres. Barry Russell. “It’s an action that would lower gasoline prices for American consumers while positioning the US more powerfully in the international energy arena.”

Iran produced 3.5 million b/d of crude in late 2011 before the recent round of international sanctions, the US Energy Information Administration said in its latest Short-Term Energy Outlook (STEO). It said the sanctions forced the country to shut in a substantial part of its production, reducing output to an estimated 2.9 million b/d in June.

Several factors involved

EIA said Iran’s ability to bring those operations back online and increase exports depends on several factors, including the shut-in oil fields and infrastructure’s current condition, the pace of sanctions relief, and Iran’s ability to find buyers in the current market.

It estimated that the reentry of more Iranian oil onto markets could result in a $5-15/bbl lower baseline STEO price forecast for 2016 if a nuclear weapons limitation agreement was reached. “EIA has not changed its short-term projection for Iranian crude oil production, which assumes that production will stay close to the current level,” it added.

Lifting oil export sanctions on Iran while continuing restrictions for US-produced crude would hurt domestic producers, the US Senate Republican Policy Committee said on July 14.

It cited a June 23 Senate Energy and Natural Resources Committee majority staff report, which said, “In short, the general prohibition on exporting domestic crude oil amounts to a de facto sanctions regime against US producers. Lifting sanctions against Iran without also lifting the ban on US exports will allow Iran to compete in markets largely inaccessible to American companies.”

PACE’s Baker said continuing the US crude export ban continues to cost domestic job and harm local economies that depend on a strong oil and gas industry. “If the federal government is going to green light Iranian crude oil exports, it should also allow US companies to compete on the world market and let US consumers reap the benefits in the form of lower gasoline prices and new jobs,” he asserted.

“It’s past time to lift the 1970s-era ban on crude exports, which makes no sense for a nation that has surpassed Saudi Arabia and Russia as the world’s leading oil producer in 2015,” IPAA’s Russell said. “It’s not only good national security policy, it’s good for American energy self-sufficiency.”

Contact Nick Snow at

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


Logistics Risk Management in the Transformer Industry

Transformers often are shipped thousands of miles, involving multiple handoffs,and more than a do...

Secrets of Barco UniSee Mount Revealed

Last year Barco introduced UniSee, a revolutionary large-scale visualization platform designed to...

The Time is Right for Optimum Reliability: Capital-Intensive Industries and Asset Performance Management

Imagine a plant that is no longer at risk of a random shutdown. Imagine not worrying about losing...

Going Digital: The New Normal in Oil & Gas

In this whitepaper you will learn how Keystone Engineering, ONGC, and Saipem are using software t...