The Obama administration approved limited sales of crude oil to Mexico, one of the most significant recent actions to allow exports of crude.
The Commerce Department, which is responsible for such exports, is “acting favorably on a number of applications” to export oil to Mexico in exchange for importing oil to the United States from Mexico, Reuters reported.
Oil exports have been mostly banned for 40 years under a law meant to protect the United States from international oil volatility. But swaps are one of the areas in which the federal government has some degree of latitude.
While the volume of crude exchanged will be very limited, the move nonetheless marks a milestone in efforts by the oil industry, Republicans and others to ease the export ban.
Proponents of exports say that, with domestic oil production reaching record highs, the ban is outdated.
The swaps would likely involve U.S. companies exchanging lighter crude varieties, which have represented most of the increase in domestic production, for heavier oil, which domestic refiners are better equipped to handle, Reuters said.
Mexican state oil company Pemex applied for the swaps in January, saying it wanted to exchange about 100,000 barrels a day — about 1 percent of United States output.
Commerce also rejected export applications to countries in Asia and Europe, because they are not afforded the same priority under the law as Mexico and Canada, which already gets U.S. shipments, Reuters reported.
Sen. Lisa MurkowskiLisa Ann MurkowskiCongress should reject H.R. 1619's dangerous anywhere, any place casino precedent Democratic frustration growing over stagnating voting rights bills Graham emerges as go-to ally for Biden's judicial picks MORE (R-Alaska), a top oil export proponent and chairwoman of the Energy and Natural Resources Committee, argued in June that more foreign countries should apply to Commerce for export approvals.
Her committee approved a bill recently to lift the export ban completely.