US lifts 40-year-old ban on crude oil exports

The United States Congress has lifted the 40-year-old ban on the export of the country’s crude oil, as part of an omnibus budget bill.

Lifting the oil export ban, which was one portion of the $1.1tn spending bill that sailed through Congress on Friday, marks a historic shift for the booming US oil industry.

The Senate, in a 65-33 vote, approved lifting the ban, while the House of Representatives passed the legislation earlier in the day by a 316-113 tally.

President Barack Obama later signed the 2016 spending bill, which includes a provision that would allow the export of US crude for the first time in more than 40 years.

The Chairman of the Senate Energy and Natural Resources Committee, Lisa Murkowski, hailed the passage of legislation that would lift the 40-year-old ban on domestic crude oil exports.

“By lifting the domestic crude oil export ban, we are sending a signal to the world that our nation is ready to be a global energy superpower. With crude exports comes job creation, economic growth, new revenues, prosperity, and enhanced energy security for our allies and ourselves,” Murkowski said.

“The omnibus may be a short-term spending bill, but thanks to this provision it will deliver long-lasting benefits for our nation and the world.”

Murkowski first proposed lifting the ban on crude oil exports in January 2014 and since then has built a solid case for modernising the nation’s energy policies.

Congress, concerned about US dependence on imported oil, imposed the crude oil export ban after the Arab oil embargo of the early 1970s that sent gasoline prices soaring and contributed to runaway inflation.

Arab members of the Organisation of the Petroleum Exporting Countries imposed the embargo following the US decision to re-supply the Israeli military during the 1973 Arab-Israeli war.

US oil producers will now be able to sell crude to the already saturated international market.

The bulk of US oil comes from shale producers. Production and exploration companies argued the ban – imposed during the Arab oil embargo in the mid-1970s – was outdated and unnecessary.

Opponents claimed that lifting the ban would lead to the loss of oil refining jobs and would be bad for the environment.

As a trade-off for lifting the ban, the spending bill includes tax breaks for solar and wind power and a pledge by Republicans not to block a $500m payment to the UN Green Climate Fund.