LONDON, Jan 18 (Reuters) - The United States is unlikely to relax soon rules banning exports of most types of its crude oil, despite a huge increase in production that is forcing some domestic prices well below international markets, the West’s energy agency said on Friday.
In the absence of significant changes to the law, the International Energy Agency (IEA) said it expected U.S. oil producers to export more oil products and condensate, as well as build more pipelines to allow oil to move around more freely within North America.
“While the need for export capacity is clear, U.S. producers are hopelessly constrained in their capacity to export domestic crude,” the IEA said in its monthly oil market report.
“Large legislative changes seem unlikely in the short term, and we are likely to see instead workarounds such as crude/product swaps and/or an expansion of condensate exports.”
The Paris-based IEA, which advises major oil-consuming nations on energy policy, said “intraU.S. infrastructure” was likely to be improved to make it easier to move some of the new light, tight oil being produced from unconventional oilfields such as Eagle Ford, Bakken, and the Permian Basin.
Extra infrastructure was needed to get this new oil to areas where “light, sweet crude remains a staple of the refining feedstock slate, predominantly the East Coast”.
The IEA said it anticipated increasing pressure on the U.S. Department of Commerce’s Bureau of Industry and Security to liberalise rules governing the movement of oil in and around the United States.
“Shipping reform ... the expansion of existing Gulf Coast-to-East Coast pipelines, and a change in the refining slates are just a few ways in which rising light, tight oil volumes could avoid or delay crashing into the export wall.”