After a 40-year ban on US oil exports was lifted, Exxon Mobil Corporation became the first major American oil company to export crude oil trying to ease the crisis in the oil market in the US, together with other oil firms, Bloomberg reported.
Exxon is the first American firm that joins the race, which comes as domestic US crude inventories surge to the highest level in nearly 90 years. Earlier in February, the US oil company’s Maran Sagitta oil tanker traveled from Texas, where Exxon operates a refinery, to deliver crude oil in the Italian port of Augusta, in Sicily.
“While we do not comment on the details of proprietary commercial agreements, crude exports from the US are now another commercial option that we may elect to exercise from time to time,” Exxon said in an e-mailed statement.
Until now, trading houses including Vitol Group BV, Trafigura Pte, and European-based oil companies have shipped US crude overseas. Enterprise Products Partners LP, one of the biggest operators of oil ports in the US, announced it expected to handle exports of about 13m barrels in Q1 of 2016. On top of Italy, traders and companies are exporting US crude to Venezuela, Germany, the Netherlands and Israel among other locations. Oil traders are also shipping West Texas Intermediate to refiners in the Mediterranean to profit from the difference in crude prices between the two regions.
The overseas sales could relieve pressure on storage capacity in the US, after stockpiles rose to nearly 518m barrels in March, the highest level in official data going back to 1930.
The exports follow a congressional deal in December to lift a 1970s-era ban on overseas shipments, which was imposed on US oil producers in the aftermath of an oil embargo from 1973 to 1974 that had heavily impacted the US economy, Business Finance News informed.