Conoco first out of the gate as crude export ban lifted

This week's US Upstream Week in Brief reports on the first US crude oil shipment in roughly 40 years, marking the repeal of the crude export ban. Our analysts discuss why this inaugural launch is more of a symbolic victory than a step toward greater profitability in the current oil price climate, and how that could change in coming years. 

After the US government lifted its 40-year-old ban on exporting crude oil, ConocoPhillips was first out of the gate to ship crude from Port Corpus Christi on December 31. Less than two weeks after Congress repealed the ban, ConocoPhillips and NuStar Energy sold Eagle Ford crude to Vitol for transport to European markets.

Although the repeal has prompted excitement for some oil companies, our analysts forecast minimal near-term impact, viewing the inaugural shipment as more symbolic than substantive. In the current economic climate, the narrow Brent-LLS differential makes it more profitable for US crude oil producers to sell their volumes on the Gulf Coast. If oil prices rise as excepted in H2 2016 and 2017, however, this dynamic could change.

For more analysis on US Upstream market dynamics, our comprehensive North America Upstream year-in-review Insight looks back on the industry's journeys throughout 2015.

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You can purchase our full US Upstream Week In Brief on demand to read this week's top stories in the North America Upstream sector, including Mexico's attractive terms for deepwater licensing, WPX's San Juan midstream divestiture, gas price pain for Swift and Southwestern, and the latest short-term supply scenarios in the face of falling rig counts.


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