Relieving Oil Export Injunction Lowers Global Oil Prices
Posted: 10/22/2014 01:10:52 Edited: 10/22/2014 02:10:52 Clicks: 2310
On October 20, a report published by Government Accountability Office claimed that relieving oil export injunction would increase American oil production, lowering global oil prices and American civilians’ fuel cost. Meanwhile, the organization suggested the government adjust American strategic petroleum reserves according to the latest and future oil market situation.
The report expressed that for American oil prices lower than international oil prices, the U.S. relieving oil export injunction would make domestic oil prices rises, stimulating American oil production to grow. From 2015 to 2035, American daily production will rise from 1.3 hundred thousand barrels to 3.3 million barrels. In the meantime, the U.S. prohibiting oil to export will increase global oil supply, resulting in global oil prices declining. Because of American prices of gasoline, diesel and other oil products fluctuate with international oil prices, instead of domestic oil prices. American civilians’ fuels cost is estimated to fall.
The report also suggested that American government should adjust strategic petroleum reserve based on current and future market situation after relieving oil export injunction. The U.S. is a member of IEA. Nevertheless, American public and private institutions must reserve oil or oil products which are equivalent to 90 days of net import volume. In recent years, gas and oil production grow greatly due to shale gas revolution, while the oil net import volume shows a trend of declining constantly. By the first half of this year, rate of American oil net import volume accounting for consumption decreased from 60% to 30%, having reduced by half, compared with 2005.
Since May, American strategic oil reserves were amount to 106 days of net import volume, about 73 billion dollars. What’s more, oil reserved by private institutions were equivalent to 141 days of net import volume. EIA predicts that American oil net import volume will maintain current low level in long-term in the future.
The report also considered that relieving oil export injunction would promote economic growth in the U.S. and decrease trade deficits further while having influence on environment.
The report expressed that for American oil prices lower than international oil prices, the U.S. relieving oil export injunction would make domestic oil prices rises, stimulating American oil production to grow. From 2015 to 2035, American daily production will rise from 1.3 hundred thousand barrels to 3.3 million barrels. In the meantime, the U.S. prohibiting oil to export will increase global oil supply, resulting in global oil prices declining. Because of American prices of gasoline, diesel and other oil products fluctuate with international oil prices, instead of domestic oil prices. American civilians’ fuels cost is estimated to fall.
The report also suggested that American government should adjust strategic petroleum reserve based on current and future market situation after relieving oil export injunction. The U.S. is a member of IEA. Nevertheless, American public and private institutions must reserve oil or oil products which are equivalent to 90 days of net import volume. In recent years, gas and oil production grow greatly due to shale gas revolution, while the oil net import volume shows a trend of declining constantly. By the first half of this year, rate of American oil net import volume accounting for consumption decreased from 60% to 30%, having reduced by half, compared with 2005.
Since May, American strategic oil reserves were amount to 106 days of net import volume, about 73 billion dollars. What’s more, oil reserved by private institutions were equivalent to 141 days of net import volume. EIA predicts that American oil net import volume will maintain current low level in long-term in the future.
The report also considered that relieving oil export injunction would promote economic growth in the U.S. and decrease trade deficits further while having influence on environment.
