One option for Trump to get energy prices down domestically would be to implement an export ban.
Politico reports:
The White House will not implement a crude export ban, and told oil executives as much at this morning’s meeting with API, per an admin official who participated in the meeting.
HFI Research illustrates some of the problems a ban would cause, as the US system is highly integrated with foreign energy.
I don’t think people realize how bad a crude export ban would be for US shale producers.
Here’s an illustrative example.
Refinery throughput would remain depressed due to crude quality mismatch.
All of the crude imports will come from Canada + some from Venezuela.
US shale is now landlocked, so US commercial crude storage will build.
US commercial crude storage will build so fast that it will force producers to shut-in production.
This is NOT a scenario you want.
If US commercial crude storage builds too fast, it will jam up Canadian crude exports. WCS-WTI differentials will widen, Canadian crude inventories will fill up.
They estimate US commercial storage would fill by May.
In response to this report, WTI is rising and brent is coming down, closing a portion of the wide spread.
WTI daily
Other energy/war news hitting in the past few minutes:
- Israel’s Haifa refinery was hit but officials say damage not significant
- Netanyahu will hold a press conference at 1830 GMT (2:30 pm ET)
- Trump is meeting with Japan’s Takaichi today
WTI crude oil last trade at $96.84, up $1.40 while brent was up $5.14 to $112.69 after reaching as high as $119.13. I believe there was some speculation that Trump’s scheduled meeting today would be where he would oil executives about an export ban. Obviously that didn’t happen so we could see some relief here in general.
