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Crude oil export ban lifted in U.S.

The U.S. overturned its longstanding ban on crude-oil exports. It included an extension of tax credits to support renewable energy. Lifting the crude-oil export ban was a top priority for crude-oil producers and the U.S. Chamber of Commerce. There is some possibility that lifting the ban could trigger some capital spending in the pipelines and terminals industries. U.S. crude-oil production has nearly doubled in the last decade, but producers were prohibited from exporting nearly any of that production. As the production of light sweet crude oil has soared, domestic refiners have had a limited ability to process much of that new crude oil. Refiners have reconfigured their plants to process a slate of heavier crude, such as has been imported from Mexico and South America. So much of the excess production has gone into storage at Cushing, Oklahoma, and elsewhere. Lifting the ban, while welcomed by crude-oil producers, is not likely to significantly improve their business outlook in the near term. The world remains over-supplied with crude oil, and sluggish demand growth has pushed down prices over the last 18 months. In addition, as Iran prepares to resume its crude oil exports following the lifting of sanctions against it, additional crude will hit the market, potentially pushing prices down further unless new demand surges.