Biden called on to ban oil exports

Imports and Exports | | MIC Customs Solutions |

Could US president Joe Biden bow to pressure from politicians and introduce a ban on oil exports?

US president Joe Biden is facing calls from his Senate to ban oil exports from America amid rising prices for consumers at the gas pumps.

A collective of Senate Democrats wrote a letter to their leader this week suggesting that desperate measures may be needed to fight a seven-year high in prices.

"In light of these pressing concerns, we ask that you consider all tools available at your disposal to lower US gasoline prices. This includes a release from the Strategic Petroleum Reserve and a ban on crude oil exports," they concluded.

However, analysts have criticized this, insisting neither move would solve the supply chain problems being faced by the nation's economy.

Indeed, it may be that Brent crude prices could soar should an export ban lead to poor global supply levels.

Both Goldman Sachs and Rapidan Energy Group have agreed that halting exports would be counterproductive, while the Texas Alliance of Energy Producers told Fox News Digital it thinks the real solution would be to 'get out of the way' of refineries and allow increased production to meet the soaring demand that has been recorded since the pandemic started to ease.

Should a ban be put in place, it would not be the first time that US oil producers have been stopped from sending their products overseas. A 40-year ban imposed during the Arab oil embargo in the 1970s was actually only lifted six years ago, allowing American producers to once again sell their crude on international markets.

Since then, the US has become one of the world's largest oil producers and ships its products to more than 50 countries. According to the Energy Information Administration, it shipped almost three million barrels of crude per day in August 2021 alone.

Crude oil exports accounted for 38 per cent of total gross petroleum exports in 2020, with the top five destination countries for petroleum products being Mexico, Canada, China, Japan and India.

A ban on exports could create some serious issues for these nations in particular.