The lifting of the United States’ 40-year-old ban on oil export has been agreed by US Congressional leaders as a central measure of a Republican-led deal – the Omnibus bill – on tax and spending legislation. The historic decision has been advocated by the US oil industry for many years, affirming this would build fairer market conditions, stimulate economic growth and increase national energy independence.
Although it should not disrupt the world’s oil markets given that the US has become the world’s largest oil producer for more than a year, the decision confirmed that the real battle is being fought on market shares rather than on prices. Also, 1 million barrel per day of US oil would add to the existing offer, meaning that, theoretically, the bearish pressure on oil prices could be strengthened as a result.
The decision, however, has yet to be passed by the US Congress and signed into law by President Barack Obama. If so, this would create an estimated 1 million US jobs and it would add $170 billion annually to US GDP, Speaker Paul Ryan said.