Atlantic Council this week released a new commentary arguing that restricting US crude oil or petroleum product exports would not lower domestic gasoline prices and would instead likely raise them by disrupting refinery operations and reducing overall product output.
The commentary states that policymakers should keep an export ban off the table and instead maximise US supply, allowing markets to work during a period of global oil market stress.
The commentary states:
So, would cutting US oil exports lower domestic gasoline or diesel prices? On the face of it, this seems intuitive: keep more supply at home, and the price should drop. But there are several reasons why this would be ineffective. Restricting exports of light, sweet US crude would presumably lower the price of West Texas Intermediate (WTI), the dominant US crude oil benchmark. This could initially help domestic refiners who process light crude. But petroleum product prices in the United States reflect global market conditions, and gasoline and diesel prices are based on differentials to international benchmarks.
Read the full commentary: A US Oil Export Ban Could Raise Pump Prices