America’s crude oil production has surged 70% since 2009. And that’s left E&P firms scrambling to find markets to sell this supply.
There may be one more option emerging on that front, judging from news late last week.
A group of 21 U.S. senators has reportedly sent a request to the national Secretary of Commerce. Asking that the Obama government consider allowing American crude to be shipped south to Mexican consumers.
The formal letter was triggered by a request from an affiliate of Mexican state oil firm Pemex. Which is asking that it be allowed to swap 100,000 barrels per day of heavy Mexican crude for light oil and condensates produced in the U.S.
Under existing trade law, such swaps can be approved by regulators on a case-by-case basis. With the group of senators asking that the deal be given permission to proceed.
But the senators went further in their request letter. Suggesting that the Obama administration should consider allowing wholesale exports of U.S. crude into Mexico.