The Government Accountability Office (GAO) suggests that removing crude oil export restrictions could both reduce consumer fuel prices and increase the price of U.S. crude oil from ~$2 to ~$8 per barrel.
Regulations implemented 40 years ago are being reviewed as technological advances in the extraction of crude oil from shale formations, commonly known as hydraulic fracturing or “fracking”, have contributed to increased U.S. oil production. In recent years U.S. crude oil prices have been lower than international prices but removing export restrictions could generate more revenue for oil companies and cause international crude oil prices to decrease.
If, as estimated, international crude oil prices do decrease, consumers could see anywhere from 1.5 to 13 cents per gallon drop for refined oil products such as gasoline and diesel. However, experts cautioned that estimates of the price implications of removing export restrictions are subject to uncertainties and there could be important regional differences.
Additionally, removing crude oil export restrictions could benefit in the following areas:
- Economy: Removing export restrictions would lead to increased investment in crude oil production and increases in employment. This could result in additional positive effects for employment and government revenue.
- Industry: Increased domestic production of crude oil will result from eliminating current export restrictions. Estimates range from an additional 130,000 to 3.3 million barrels on average per day until 2035.
After decades of generally calling U.S. crude oil production, from 2008 through 2014 production increased by about 74%. Perhaps, lifting the restrictions on crude oil could help both the economy of the U.S. and the average consumer.