Study: Fuel Prices Would Rise If U.S. Crude Oil Is Exported
Exporting U.S. crude oil would raise gasoline, diesel and home heating prices, cutting into the vast benefits Americans are enjoying from lower crude oil prices, according to a new report by Alan Stevens of Stancil & Co.
According to the report, Americans currently benefit from lower fuel prices because long-standing export restrictions help provide the lowest free-market base price for gasoline of any nation.
The analysis also finds that exports would hurt the domestic refining sector and America’s balance of trade, and have negative implications for U.S. national security.
The study finds that lifting crude export restrictions would:
- Increase domestic crude prices by $3.00 per barrel, impacting all consumers;
- Raise domestic gasoline, jet fuel, diesel, and heating oil prices;
- Negatively impact the U.S. balance of trade, increase foreign crude oil imports and foreign refined products, while reducing exports of refined products;
- Reduce domestic refinery utilization and/or possible cause refinery shutdowns, which would induce layoffs at affected refineries and their service providers, which in turn would affect the wider economy.
The study also finds:
- Domestic refining capacity and utilization is at an all-time high;
- The Organization of Petroleum Exporting Countries (OPEC) cartel continues to control crude oil prices indirectly through its regulation of production volumes;
- With the United States still importing 47 percent of its crude supply, allowing exports would increase U.S. reliance on less secure foreign energy sources.
The report states: “Allowing exports of crude would escalate U.S. crude prices to parity with world prices, with U.S. Gulf Coast gasoline prices returning to their historical premium of $0.034 per gallon versus European gasoline prices. The gasoline price to the U.S. consumer would rise $0.084 to $0.145 per gallon from today’s price level.” (See, page I-5).
“This study clearly demonstrates that exporting U.S. crude will raise prices at the pump,” noted Jay Hauck, Executive Director of The CRUDE Coalition. “This report is a holistic and thorough analysis of energy markets, which shows that American consumers and businesses will take a major hit if Congress lifts export restrictions. This is more evidence that Congress should think long and hard before rushing to change our 40-year-old energy independence law.”
Read the study here.