US Promotes “Stabilised” Crude Oil Exports

The U.S. Commerce Department opened the door to more U.S. oil exports as long as the crude is lightly processed, tempering the impact of a law that’s banned most overseas petroleum shipments for the past four decades.

The department widened its definition of what’s traditionally been considered a refined product eligible for shipping to customers abroad. That means more of the oil being pumped from U.S. shale formations may be eligible for export after being run through small-scale processing units.

The Commerce Department issued its ruling after Pioneer Natural Resources Co. petitioned for approval to export a type of ultra-light oil that had been stripped of lighter gases to make it less volatile for transport -a minimal level of processing known as stabilization. The ultra-light oil, known as condensate, has been abundant in shale formations during the shale drilling boom, leading to oversupplies on the Gulf Coast.

Distillation Exception

Any oil that has been processed through a distillation tower - a preliminary form of refining- is no longer defined as crude oil, and therefore is eligible for export, said Jim Hock, a department spokesman, in a statement on 24 June.

Pioneer uses a distillation unit to stabilize oil it produces in the Eagle Ford Shale of South Texas, most of which is condensate.