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The Biden Administration’s calls for U.S. refiners to limit their fuel exports would only lead to a more severe crunch overseas which will push crude oil prices and gasoline prices in America higher, U.S. supermajor ExxonMobil has warned.
In August, amid low inventories at home, the Biden Administration urged American refiners to limit their fuel exports, according to a letter U.S. Energy Secretary Jennifer Granholm had sent to seven big refiners obtained by The Wall Street Journal.
“Given the historic level of U.S. refined product exports, I again urge you to focus in the near term on building inventories in the United States, rather than selling down current stocks and further increasing exports,” Secretary Granholm wrote in the letter, according to the Journal.
Commenting on the Administration’s calls for lower fuel exports, Exxon’s chief executive Darren Woods wrote this week in a letter to the U.S. Department of Energy reviewed by The Wall Street Journal, “Continuing current Gulf Coast exports is essential to efficiently rebalance markets—particularly with diverted Russian supplies.”
“Reducing global supply by limiting U.S. exports to build region-specific inventory will only aggravate the global supply shortfall,” Exxon’s top executive wrote in the letter.
Referring to low inventories in the United States, Woods wrote in the letter, “Free market incentives remain the most efficient way for the industry to address these problems.”
Earlier this week, EIA data showed that U.S. exports of petroleum products jumped by 11% to a record 6 million barrels per day (bpd) in the first half of 2022, with exports growing at their fastest pace in five years.
President Biden, for his part, this week urged – again – fuel retailers to bring down prices at the pump.
“My message is simple. To the companies running gas stations and setting those prices at the pump: Bring down the prices you’re charging at the pump to reflect the cost you pay for the product. Do it now,” President Biden said on Monday.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com