BP has agreed to take 80 percent capacity of a new $360 million mini-refinery in Houston that will refine just enough crude oil to avoid the restrictions that are placed on exporting crude oil out of the U.S. This is happening as pressure mounts from the oil industry on President Barack Obama to end the ban on exports, which is now 41 years old.
There has lately been a large influx of crude oil due to new technologies and refineries are finding themselves with a surplus that the U.S. market is not absorbing. Many have begun transforming the product into other things that can be exported, such as propane gas.
"It's a relatively inexpensive way around the export prohibition," said Judith Dwarkin, chief energy economist for ITG Investment Research Inc. "You can lightly ruffle the hydrocarbons and they are considered processed and then they aren't subject to the ban."
According to Bloomberg, the shale-oil boom in the U.S. is raising production of crude oil to levels that haven't been seen since 26 years ago. U.S. imports have been cut, affecting prices in the Middle East market.