HOUSTON — Ever since the 1970s, when international oil boycotts threatened the US economy and produced around-the-block waiting lines at gasoline stations, a ban on oil exports has been at the heart of national energy policy.
Now, if a congressional deal holds up and President Obama agrees as is expected, that policy is about to be reversed.
With the world overflowing with oil, it is unlikely the repeal of the ban will have a big immediate impact on crude prices or suddenly lift the American oil industry out of its tailspin of bankruptcies, job losses, and dropped dividends.
Oil prices have sunk by nearly two-thirds since the summer of 2014. Global storage is full to the brim; Iranian exports are about to hit the market and global trade is slowing, so few experts see a big expansion of markets anytime over the next year at least. At the same time, the price spread between American oil and international benchmark prices has narrowed significantly in recent months, making American exports less competitive.
But for oil executives, the deal was the culmination of a long-sought goal, even if it will take time to help them much.
"It will mean more jobs, more drilling," said Scott Sheffield, chief executive of Pioneer Natural Resources, which is based in Texas. Sheffield, a leading advocate for lifting the ban, added: "That helps the entire economy, energy security; it helps with our allies, it will help our trade balance. To me it's very, very big,"
Oil executives and other experts also said that the repeal would open new markets for US oil in Mexico, South Korea, Japan, and China over the next several years, easing those countries' dependence on unstable supplies from the Middle East, North Africa, and Russia.
And most immediately, lifting the ban should give some American oil companies a few modest new markets and a bit of extra flexibility that might be the difference between shutting off some production in such places as Texas and North Dakota and eking out a bit of cash to keep the taps on.
"Connecting US oil production to global markets will have immediate national security impacts," said David Goldwyn, who was the top energy diplomat in the State Department during the first Obama administration, "and as the market recovers, it will enable struggling American companies to meet rising demand."
Environmentalists have long opposed the change in policy, contending it will encourage more drilling and production when they say the world should be shifting to renewable energy. They say more oil production means more hydraulic fracturing, air pollution, and threats to local water supplies. That is why Democratic lawmakers insisted that the repeal be accompanied by an extension of tax credits for wind and solar energy.
Energy experts said the congressional action was at least symbolically important. They noted that conditions in the global oil markets could change suddenly at any time, given the instability of North Africa, the Middle East, and in other major producing countries such as Venezuela and Nigeria. American oil on world markets could serve as a buffer for future shocks.
Lifting the ban, they said, sends a telling message to President Vladimir Putin of Russia that the United States can push for stronger sanctions against Russian oil without jeopardizing the economies of countries that buy its oil, especially in Europe. It also means that if Iran does not comply with its nuclear agreement and sanctions are snapped back, Iranian customers such as India and Japan can look to the United States as an important new oil source.
"The US crude oil export ban is the symbolic manifestation of the historical trauma of America's experience of the 1973 oil embargo," said Amy Myers Jaffe, executive director of energy and sustainability at the University of California Davis. "Taking this law off the books reflects the new reality of America's energy power."
The repeal would have been unthinkable only a few years ago, when domestic production fell year after year until the shale revolution took hold in 2007 and 2008. Using hydraulic fracturing to blast through hard rocks with water, sand, and chemicals, the industry began to produce in fields that had been largely worthless. Oil production nearly doubled by early this year to more than 9 million barrels a day, replacing most imports from the Middle East and North Africa.
The export ban has covered crude produced in the lower 48 states and exports other than those to Canada, while exports of such processed fuels as gasoline and diesel have been allowed. The Obama administration has tinkered with the ban, allowing in 2014 the export of a limited amount of extra light oil.