4 ms·

My understanding is that the US President (currently Biden) can unilaterally ban oil exports and that this would immediately drop US oil prices to $70-80/barrel

by nugget 4y ago

My understanding is that the US President (currently Biden) can unilaterally ban oil exports and that this would immediately drop US oil prices to $70-80/barrel and spike global oil prices by 30%+. I wonder how bad domestic gas prices would need to be before this happens because it definitely feels like it would be a permanent nail in the coffin of energy globalization.

causi 4y ago
It would certainly screw over US allies but it wouldn't do that much good for domestic prices because domestic refineries aren't built to use light/sweet American oil. Domestic production would collapse as domestic oil sat unusable for months. What we need is taxes/regulations to force the building of refineries to process domestic crude.
- b112 4y ago
  Hold on, I'm in Canada, and the story here, is that we don't have domestic refineries, we get gas from US ones, now I hear you guys are told the you don't have domestic refineries too?! What, is everyone told this???
  - krallja 4y ago
    It’s all rented from a refinery in Virginia called us-east-1.
  - codazoda 4y ago
    The commenter your replying to is talking about "sweet" oil. According to this adage, US refineries are setup to process sour oil but in the US we drill for sweet oil. As a result we need to export sweet oil and import sour oil. I've heard from one person, who delivers oil, that our refineries are able to switch relatively easily. So, I'm unsure what the whole story is, but that's what the other comment was referring to. We definitely do refining in the US and there are several refineries near me.
    - b112 4y ago
      I'm sure the story is, "Tell em anything just keep the profits high".
    - marcosdumay 4y ago
      If your refineries can process cheap sour oil, they can easily be repurposed into processing expensive sweet oil. But why would you do that, instead of selling the expensive oil and buying some cheap one back?
- OkayPhysicist 4y ago
  We have plenty of refineries tuned for all kinds of crude. The vast majority of US crude gets refined here, and exported as refined products. That's not to say the industry wouldn't go belly up from suddenly having a bunch of unused, expensive oil refineries, but our ability to refine US oil wouldn't be in peril from a lack of refineries.
- grimjack00 4y ago
  >force the building of refineries to process domestic crude. Who would want to build a refinery when the current President has stated he wants to shut down the fossil fuel industry?
nine_zeros 4y ago
> My understanding is that the US President (currently Biden) can unilaterally ban oil exports and that this would immediately drop US oil prices to $70-80/barrel and spike global oil prices by 30%+. I wonder how bad domestic gas prices would need to be before this happens because it definitely feels like it would be a permanent nail in the coffin of energy globalization. There is a big problem with banning US oil exports. Oil is priced in US dollars and this only works if the US continues to be a global political player. If the US stops exports, the price of oil in dollars will rise so much that most other countries will have no choice but to start importing from Russia again - and in a currency that is not US dollars. Overnight, the US will experience rapid inflation due to all the printed dollars losing value for the rest of the world.
weberer 4y ago
It would be nice to first try getting domestic oil production back up to 2019 levels. https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrfpus2&f=m https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=m...
benj111 4y ago
So the rest of the world goes into recession, so that drags down the US with it. And/or low prices lead to low investment, both in to new oil and alternative energy thus dooming the industry long term while giving the rest of the world a head start in future technologies. And/or the rest of the world gets pissed off, imposes their own sanctions, look to more reliable allies, look to different reserve currencies etc etc etc.

by nugget 4y ago

causi 4y ago

It would certainly screw over US allies but it wouldn't do that much good for domestic prices because domestic refineries aren't built to use light/sweet American oil. Domestic production would collapse as domestic oil sat unusable for months. What we need is taxes/regulations to force the building of refineries to process domestic crude.

b112 4y ago
Hold on, I'm in Canada, and the story here, is that we don't have domestic refineries, we get gas from US ones, now I hear you guys are told the you don't have domestic refineries too?! What, is everyone told this???
- krallja 4y ago
  It’s all rented from a refinery in Virginia called us-east-1.
- codazoda 4y ago
  The commenter your replying to is talking about "sweet" oil. According to this adage, US refineries are setup to process sour oil but in the US we drill for sweet oil. As a result we need to export sweet oil and import sour oil. I've heard from one person, who delivers oil, that our refineries are able to switch relatively easily. So, I'm unsure what the whole story is, but that's what the other comment was referring to. We definitely do refining in the US and there are several refineries near me.
  - b112 4y ago
    I'm sure the story is, "Tell em anything just keep the profits high".
  - marcosdumay 4y ago
    If your refineries can process cheap sour oil, they can easily be repurposed into processing expensive sweet oil. But why would you do that, instead of selling the expensive oil and buying some cheap one back?
OkayPhysicist 4y ago
We have plenty of refineries tuned for all kinds of crude. The vast majority of US crude gets refined here, and exported as refined products. That's not to say the industry wouldn't go belly up from suddenly having a bunch of unused, expensive oil refineries, but our ability to refine US oil wouldn't be in peril from a lack of refineries.
grimjack00 4y ago
>force the building of refineries to process domestic crude. Who would want to build a refinery when the current President has stated he wants to shut down the fossil fuel industry?

nine_zeros 4y ago

> My understanding is that the US President (currently Biden) can unilaterally ban oil exports and that this would immediately drop US oil prices to $70-80/barrel and spike global oil prices by 30%+. I wonder how bad domestic gas prices would need to be before this happens because it definitely feels like it would be a permanent nail in the coffin of energy globalization. There is a big problem with banning US oil exports. Oil is priced in US dollars and this only works if the US continues to be a global political player. If the US stops exports, the price of oil in dollars will rise so much that most other countries will have no choice but to start importing from Russia again - and in a currency that is not US dollars. Overnight, the US will experience rapid inflation due to all the printed dollars losing value for the rest of the world.

weberer 4y ago

It would be nice to first try getting domestic oil production back up to 2019 levels. https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrfpus2&f=m https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=m...

benj111 4y ago

So the rest of the world goes into recession, so that drags down the US with it. And/or low prices lead to low investment, both in to new oil and alternative energy thus dooming the industry long term while giving the rest of the world a head start in future technologies. And/or the rest of the world gets pissed off, imposes their own sanctions, look to more reliable allies, look to different reserve currencies etc etc etc.