June 25 Shares of U.S. refiners such as Valero
Energy Corp dropped on fears of a rise in crude costs
after U.S. officials allowed energy companies to export very
light crude oil, or condensate, after it has been minimally
The U.S. Department of Commerce's Bureau of Industry and
Security told Pioneer Natural Resources Co that lightly
processed condensate would be eligible for export without a
The ruling sent down shares of refiners most levered to
light crude oil. Valero shares were down about 9 percent at
Shares of Alon USA Energy Inc were down 4 percent at
$13.27 in morning trading, Delek US Holdings Inc and
HollyFrontier Corp were down nearly 7 percent, while those of
Western Refining Inc were 6 percent lower.
On the other hand, the ruling lifted shares of many U.S. oil
and gas producers, particularly those more weighted to
Eagle Ford shale producers Rosetta Resources Inc
and SM Energy Co were up about 4 percent.
Analysts said the ruling was one step towards alleviating
the light oil glut on the U.S. Gulf Coast and would potentially
weigh on refining margins.
U.S. refiners may see crude costs go up as they would have
to compete with international buyers for supplies, they said.
Most refiners, with the exception of Phillips 66,
have campaigned against a lifting of the U.S. ban on exports.
"This (the Commerce department's ruling) may be a precursor
or trial balloon to less restrictive condensate exports or even
light crude oil over the longer term," analysts at Tudor
Pickering Holt Energy wrote in a note.
The Department of Commerce had given approval via a private
ruling to Pioneer and Enterprise Product Partners LP to
export the condensate, the Wall Street Journal reported on
(Reporting by Swetha Gopinath in Bangalore; Editing by Don