EXPERTS: US Crude Oil Swaps Are Not A Good Way To Get Around The Export Ban

http://www.businessinsider.com/r-testing-us-crude-oil-export-ban-with-swaps-no-simple-matter-2014-26


An oil and gas drilling platform stands offshore as waves churned from Tropical Storm Karen come ashore in Dauphin Island, Alabama

WASHINGTON (Reuters) - Oil producers considering swapping U.S. light crude abroad for the heavier imported oil needed by refiners to work around a decades-old ban on exporting domestic crude may find the strategy harder to execute than it looks on paper.

As U.S. production of light crude oil continues to boom, some companies and lawmakers are calling for the United States to reform its decades-old ban on most U.S. crude oil exports - a policy that followed the Arab oil embargo of the 1970s.

A breakthrough arguably came this week, when U.S. officials clarified that a type of ultra-light crude known as condensate could be exported after enough processing to qualify as a refined product, exports of which are allowed. Swaps would be another way to test the ban's limits.

In theory it should take just weeks for Washington to allow oil producers to execute a deal, since these swaps are allowed by law. But analysts say meeting the base requirement - that the imports be of the same quantity and quality as the exports - is easier said than done.



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