2 Sep 2015

Report clears way for US crude oil exports

12:05 pm on 2 September 2015
An oilfield near Los Angeles.

Photo: AFP

A report, by a branch of the US Department of Energy, clears the way for the American surplus to be exported, which could lower the average price of oil in world markets.

The US is now biggest oil producer in the world - ahead of Russia and Saudi Arabia. Production has increased by 70 percent in five years and oil storage is brimming over.

However crude oil exports have been all but banned under federal law since tension in the Middle East disrupted the supply of oil in the 1970s.

As a result American crude oil is mainly constricted to the internal market, making it about $US5 a barrel cheaper than Brent Crude, which trades internationally.

The US report forecasts that gap to grow to about $US10 a barrel.

At this stage the White House has not said what it will do in response to the report.