“Are you more desperate to get a better deal when you’re poor? I guess you are.”
That was John Auers, executive vice president of oil industry consulting firm Turner Mason & Company, describing the oil industry as being “poor” and “desperate” to Bloomberg.
As the oil industry cries poverty due to low oil prices in an effort to justify its attempts to lift all restrictions on exporting crude oil produced in the U.S., it is helpful to remember that this is an industry that was demanding tax breaks for oil production even when, in 2013, the top 5 companies made a combined $93 billion in profits. In just the second quarter of 2014 alone, a year of poverty and desperation, as the industry tells it, ExxonMobil made $8.8 billion in profit.
The “better deals” that John Auers was talking about are to be found on the global market, which technically isn’t open to those “poor” U.S. crude oil producers due to the crude oil export ban. Crude oil that is produced in the U.S. is worth more if it is sold on the world market than if it is sold in the United States.
So, it should come as no surprise that in November, as oil prices began falling, U.S. producers went about finding ways to export oil using some existing exemptions from the Reagan era as well as some new approaches. Their efforts resulted in the U.S. breaking the all-time monthly export record in November 2014. The previous record was set in 1957, a time when there was no export ban.
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