Oil exec says law allowing US crude exports helps keep oil prices low despite Mideast tension
WASHINGTON Oil prices have remained low despite heightened tensions between two of the world's big oil-producing countries, Iran and Saudi Arabia, and a new law allowing U.S. crude exports helps explain why, the oil industry's top lobbyist said Tuesday.
Jack Gerard, president and CEO of the American Petroleum Institute, said the 3-week-old law lifting a 40-year ban on crude exports has already changed the dynamics of the global oil industry.
The potential for U.S. exports, combined with the ongoing U.S. oil boom, means "the United States has come in as a major player" in the global oil market, reducing the influence of countries such as Saudi Arabia and Iran, Gerard said.
"The geopolitics of energy will never be the same," Gerard said in a speech outlining the industry's priorities for the year.
The price of oil fell 30 percent last year, following a 50 percent plunge in 2014. At below $36 a barrel on Tuesday, the price is down more than 2 percent so far this year. Even heightened tensions between Iran and Saudi Arabia have failed to halt the slide amid a persistent glut of oil.
Oil prices are likely to remain about where they are until either production drops or the world economy perks up and drives demand higher.
Gerard said the situation stands in stark contrast to what could have been expected 10 years ago. "Oil would have spiked," he said.
The API and other industry groups pushed hard for the measure lifting the export ban, which they called a relic of the 1970s, when an OPEC oil embargo led to fuel rationing, high prices and iconic images of long lines of cars waiting to fuel up.
The ban was lifted as a part of a massive, year-end budget deal approved by Congress and signed by President Barack Obama last month.
Despite that victory — and a surge in oil and natural gas production in the past seven years — Gerard criticized the Obama administration for imposing what he called unnecessary regulations on oil and gas drilling, especially on federal lands. Most of the increased drilling has occurred on state and private