U.S. Oil Export Shift Prompts Fresh Look at Shipments

The U.S. could allow about 750,000 barrels a day of light crude oil to be exported, based on a new government stance defining what qualifies for overseas shipments.Producers, refiners and pipeline companies are questioning exactly how much the Obama administration has relaxed its position on crude exports after the Commerce Department said June 24 it had categorized some lightly processed oil as exportable. The U.S. has prohibited most crude exports for four decades.About 750,000 barrels a day of oil produced from U.S. shale plays is an ultra-light variety known as condensate, said Michael Wojciechowski, head of Americas downstream research for Wood Mackenzie Ltd. More than 70 percent of U.S. condensate comes from the Eagle Ford shale formation in Texas, where the majority of it goes through a heating process to burn off certain gases, Amrita Sen, chief oil economist for Energy Aspects Ltd. in London, said by phone.The Commerce Department gave permission for condensates to be exported after going through the process, known as stabilizing, because then it can be considered a refined product. Though most raw crude oil exports are banned, refined products can be shipped abroad without limits.Stabilizers at oil fields along the U.S. Gulf Coast may have a combined capacity of more than 200,000 barrels a day, according to Eric Lee, a commodities strategist for Citi Research.

via U.S. Oil Export Shift Prompts Fresh Look at Shipments – Bloomberg.

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