Tension between Oil Producers and Refiners Upgrading
Posted: 09/01/2014 04:09:18 Edited: 09/01/2014 04:09:18 Clicks: 680
It is reported that at least ten oil corporations in the U.S., including Marathon Oil Corporation, ConocoPhillips, Amerada Hess Corp, Continental Resources Company and Pioneer Natural Resources Company begin to persuade Obama to call off oil export prohibition which has been lasted for 40 years organically. The reason is that abolishing oil export prohibition will be helpful for jot creation and stimulating economy while oil refiners set themselves against the proposal. Because abandoning oil export prohibition will damage their benefits.
Since the early of this year, tension between oil producers and refiners are upgrading constantly. Jamie Webster, executive of global oil market of HIS says that American politicians will find that American oil refineries cannot deal with amount of oil produced in the U.S. in the forth quarter of this year at the soonest. In May, a report published by IHS showed that if the U.S. called off oil export prohibition, gasoline price in the U.S. would be decreased by 0.08 dollars per gallon. Because the U.S. exporting oil will increase oil supply in global oil market and lead to global oil price decline.
Oil export prohibition was passed after Arabic countries carrying out oil embargo in 1970’s. According to the law, American enterprises are not allowed to export oil without special permission of government, except for gasoline, diesel oil and petroleum products.
American oil companies mainly persuade congressmen and government officials to support exporting oil. They consider that the U.S. has already become the largest oil producing country. So the U.S. can sustain the impact caused by oil export. Nowadays, oil output in the U.S. has exceeded 8 million barrels per day, rising by 55% compared with 5 years ago. Although the U.S. still imports oil, import oil accounts for 33% of total oil consumption, which is the lowest level since 1985.
American oil refiners set themselves against the U.S. abolishing oil export prohibition. For policy, oil refining enterprises are usually on the same front with oil producers. However, they have divergence with oil producers on the policy. Oil refiners are fully enjoying fat profits caused by substantial oil supply. The current refining products exported by the U.S. are the highest level in the history. Oil refiners fear that once the U.S. releases oil export, domestic oil supply will be divided and result in price of downstream losing its advantages and competitiveness.
Oil refiners say that oil refineries in the U.S. was established to process heavy crude from the Middle East at first. They are not suitable for process light crude exploited from shale. But, Charles Drevana, president of ADPM who represents American oil refining industry says that a report shows that oil refineries can process light crude having low sulfur from shale in fact.
Since the early of this year, tension between oil producers and refiners are upgrading constantly. Jamie Webster, executive of global oil market of HIS says that American politicians will find that American oil refineries cannot deal with amount of oil produced in the U.S. in the forth quarter of this year at the soonest. In May, a report published by IHS showed that if the U.S. called off oil export prohibition, gasoline price in the U.S. would be decreased by 0.08 dollars per gallon. Because the U.S. exporting oil will increase oil supply in global oil market and lead to global oil price decline.
Oil export prohibition was passed after Arabic countries carrying out oil embargo in 1970’s. According to the law, American enterprises are not allowed to export oil without special permission of government, except for gasoline, diesel oil and petroleum products.
American oil companies mainly persuade congressmen and government officials to support exporting oil. They consider that the U.S. has already become the largest oil producing country. So the U.S. can sustain the impact caused by oil export. Nowadays, oil output in the U.S. has exceeded 8 million barrels per day, rising by 55% compared with 5 years ago. Although the U.S. still imports oil, import oil accounts for 33% of total oil consumption, which is the lowest level since 1985.
American oil refiners set themselves against the U.S. abolishing oil export prohibition. For policy, oil refining enterprises are usually on the same front with oil producers. However, they have divergence with oil producers on the policy. Oil refiners are fully enjoying fat profits caused by substantial oil supply. The current refining products exported by the U.S. are the highest level in the history. Oil refiners fear that once the U.S. releases oil export, domestic oil supply will be divided and result in price of downstream losing its advantages and competitiveness.
Oil refiners say that oil refineries in the U.S. was established to process heavy crude from the Middle East at first. They are not suitable for process light crude exploited from shale. But, Charles Drevana, president of ADPM who represents American oil refining industry says that a report shows that oil refineries can process light crude having low sulfur from shale in fact.
