In his testimony before the Senate Committee on Banking, Housing, and Urban Affairs, American Enterprise Institute (AEI) John G. Searle Chair and Resident Scholar Benjamin Zycher examines how lifting the crude oil export ban would favorably impact the price of refined products such as gasoline and diesel fuel in the US:
Because refined products are not included in the export ban, and thus are traded freely in the international market, it is difficult to see how a repeal of the export ban on crude oil could increase product prices. Instead, ending the export ban actually would put downward pressure on product prices for two reasons.
First: The increase in the international supply of crude oil created by increased U.S. exports would reduce both crude and product prices overseas…
Second: Both internationally and domestically, the export ban has distorted the allocation of differing types of crude oil among refineries, which are designed in various ways to refine particular crude oil types more efficiently than others. An end to the export ban would improve the alignment of refinery and crude oil characteristics, particularly in the U.S. and particularly over the medium- and longer terms, thus reducing the cost of refining crude oil generally, and therefore of producing refined products…
Read the full testimony, “Lifting the Crude Oil Export Ban.”
To arrange an interview with Benjamin Zycher, or another AEI scholar, please contact AEI Media Services at mediaservices@aei.org or 202.862.5829.
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