The U.S. Commerce Department opened the door to more U.S. oil exports as long as the crude is lightly processed, tempering the impact of a law that’s banned most overseas petroleum shipments for the past four decades.
The department widened its definition of what’s traditionally been considered a refined product eligible for shipping to customers abroad. That means more of the oil being pumped from U.S. shale formations may be eligible for export after being run through small-scale processing units.
The Commerce Department issued its ruling after Pioneer Natural Resources Co. petitioned for approval to export a type of ultra-light oil that had been stripped of lighter gases to make it less volatile for transport -- a minimal level of processing known as stabilization. The ultra-light oil, known as condensate, has been abundant in shale formations during the drilling boom, leading to oversupplies on the Gulf Coast.
“It’s a crack in the door which has otherwise been shut for 40 years,” Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London, said by phone. “If approvals for condensate exports are extended to more companies, it’ll benefit U.S. producers and processors in Asia, particularly in Singapore and South Korea.”Click here to read the entire article.
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