The Lifting of the Oil Export Ban in the US and its Effects on the Oil Market

The US set an oil export ban after the Iranian crisis in the 1970s due to energy security issues. Since US oil production has been continuously diminishing, there had not been many issues until recently. However, after the hydraulic fracturing technology was introduced to development of shale in the US from the 2000s, this led to a revival of energy production named the ‘shale revolution’ or ‘energy renaissance’ for the abundance of oil and gas supply in the US.The abundance of the oil and gas supply has offered great prospects to the US industry revival. However, many oil producers and experts pointed that this prospect may not be fully realized had the oil ban continuously existed. The oil ban had created a lower domestic oil price (WTI) compared to international oil price standards (Brent), which discouraged oil producers to continuously invest in the shale development. Also, because the existing refineries in US had not been configured for the light tight oil produced by shale development, this contributed to a bigger cause to end the export ban. After several discussions, both political parties agreed to lift the ban at the end of 2015.In this paper, we will first look into the history of the oil ban, its creation and recent changes. Next, we will look into the new shale revolution and how it eventually caused to lift the oil export ban in US. We will then look into the prospect theories of how the lift of ban would effect the oil market internationally, and the current reality. We will also look into which countries would be the best options for exporting US oil, and what kind of obstacles must be overcome (specifically in Asia). Finally, we will look into the prospects of US oil production and exports based on the current oil market situation