A lifting of U.S. restrictions on crude oil exports likely will have no major effect on domestic gasoline prices, U.S. EIA head Adam Sieminski said Sunday on Platts Energy Week.
“Preliminary evidence suggests that gasoline prices get set in a global market,” Sieminski said on the all-energy news and analysis program. “There [are] gasoline imports and exports in very large quantities in the U.S., and the global market seems to dominate that. And what that suggests is that [crude oil] exports might not have that much of an impact on gasoline prices.”
His comments came as the EIA is close to completing a study on how U.S. crude oil exports would affect U.S. gasoline prices, as well as the relationship between crude oil prices and global gasoline prices.
The study, which is part of a series of reports the agency is compiling about the potential effects of lifting the decades-old ban on U.S. crude oil exports, will compare U.S. gasoline prices with changes in Brent crude oil prices and changes in gasoline prices in Rotterdam, Singapore and other cities.
Sieminski said the final results of those studies will be released later this year.
He said that even if the U.S. lifts its ban on crude oil exports, the country will still import a significant amount of oil, given that most new U.S. production is in light, sweet crude oil, while U.S. Gulf Coast refineries are best equipped to run heavy or sour crude oil.
“So exporting some of the stuff that we don’t need and getting in some of the stuff that we do need might be something that is best for the economy,” he said. “Even if our production continues to go up, it’s going to take a while before we could get close to the possibility of being a net exporter of all oil.”
The EIA, in its October Short Term Energy Outlook, projected that the U.S. would import 20% of its crude oil in 2015, as U.S. production is expected to increase to 9.5 million barrels per day.
The U.S. largely restricts exports of domestic crude oil, except for some shipments to Canada and certain oil produced in Alaska and California, under laws passed in the wake of the Arab oil embargoes of the 1970s. But with U.S. production booming, some lawmakers have begun calling for an easing of some or all of those restrictions.
But other lawmakers are concerned that any loosening of crude oil export laws could cause gasoline prices to rise, given that U.S. refiners enjoy cheaper prices for U.S. crude oil.
A study by global information provider IHS which was funded by oil producers and released in May said the free trade of crude oil would cause domestic gasoline prices to fall by 8-12 cents per gallon, as the extra supply of U.S. crude oil on the world market would lead to a decline in global oil prices.
