Bill Seeks Moratorium on US Oil Exports

A Democrat lawmaker introduced a legislative proposal Thursday to keep domestic crude and refined oil products within the U.S. during the war with Iran, in a bid to hold down pump prices.

"America produces more oil than we use and is a net exporter of both petroleum and refined products. If we prohibit exports, the supply will exceed the demand, and prices for American consumers will drop", the office of Congressman Brad Sherman of the 32nd District of California said in an online statement.

"Currently, American oil is going to Europe and Asia to replace Middle East oil, reducing the domestic supply and raising the prices Americans pay".

According to the Energy Information Administration's (EIA) latest update, released Monday, weekly regular gasoline prices in the U.S. averaged $4.452 a gallon, up $1.305 from the same period last year. On-highway diesel fuel prices rose $2.143 per gallon year-on-year to $5.64 per gallon during the same week.

"Higher crude oil prices have led to higher gasoline and diesel prices, with diesel remaining particularly elevated due to tight global supplies and U.S. inventories remaining below the five-year (2021-2025) average", EIA said separately in its latest "Short-Term Energy Outlook", published April 6. "We forecast retail gasoline prices to peak at a monthly average of close to $4.30 per gallon (gal) in April and average more than $3.70/gal this year. Diesel prices peak at more than $5.80/gal in April and average $4.80/gal in 2026".

Before the bill, Sherman had already written to Donald Trump two months ago urging the president to invoke executive powers under the Consolidated Appropriations Act of 2016 to impose a moratorium on crude exports while the conflict lasts.

The moratorium sought by the bill covers crude, gasoline and diesel.

"This bill prioritizes consumers by directing our energy resources toward lowering costs here at home instead of allowing companies to chase higher profits at the expense of American consumers", Sherman said Thursday.

The Stop Oil Exports to Lower Gas Prices Act proposes that Trump ban exportation until he certifies that U.S. "military operations against Iran" have ceased and the Strait of Hormuz is fully open to global trade, as per the text of the proposal.

"The bill would implement a targeted export ban designed to stabilize domestic energy markets, reduce inflationary pressure and prioritize U.S. supply during a period of international crisis", Sherman's office added.

"It also includes limited flexibility for cases where certain crude oil cannot be efficiently refined domestically, allowing narrowly tailored export licenses provided that refined products are returned to the United States".

Rigzone sent the White House and the American Petroleum Institute requests for comment on the proposed measure.

To contact the author, email jov.onsat@rigzone.com