(Bloomberg) — The Biden administration shouldn’t ban the export of crude oil, a bipartisan group of House lawmakers said in a letter to Biden.
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Re-instating the ban on the export of domestic crude oil, which was lifted in 2015, was among the options the White House was considering as it sought ways to address gasoline prices that had been hovering around a seven-year high and have set off political alarm bells at the White House.
But the letter, spearheaded by Representative Henry Cuellar, a Texas Democrat, said the move would have the opposite effect, echoing what many analysts have also said.
“Any suggestion that reinstating the crude export ban would lower gasoline prices is misguided, due to the likely spike in international crude prices, which many U.S. refineries process,” said the letter, which was also signed by Democratic Representatives Vicente Gonzalez and Filemon Vela, both of Texas, and Democrat Sanford Bishop of Georgia. It was also signed by Texas Republicans Representatives August Pfluger, Roger Williams, Tony Gonzales and Representative Carol Miller, a Republican from West Virginia.
Earlier: Lawmaker Says White House is Mulling Ban on Crude Oil Exports
President Joe Biden announced last month that he planned to release 50 million barrels of crude from the Strategic Petroleum Reserve in concert with China, Japan, India, South Korea and the U.K. — in an unprecedented, coordinated attempt by the world’s largest oil consumers to tame rising costs.
Since then the price of oil has dropped because of concern about the new omicron variant of Covid-19 and the White House is not actively considering a crude oil export ban at this time, according to a person familiar with the administration’s deliberations.
Other negative effects of a ban on crude oil exports include straining international relationships, discouraging domestic production, and creating an imbalance between refining capacity and domestic production, the lawmakers wrote.
Earlier: Biden Faces Pleas for Oil Export Ban That Would Upend Markets
It’s possible support for a ban could rise should crude oil prices rebound again, and several Democratic lawmakers have pressed the Biden administration to make that move.
“This is something that we’re very concerned about and something we’re raising to the highest levels of our government,” Mike Sommers, the chief executive of the American Petroleum Institute said Tuesday at an international oil conference taking place in Houston. “I think we’re making great progress with lawmakers on both sides of the aisle to communicate this.”
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