U.S. oil refiners will try to convince the Biden administration not to ban exports of domestic fuel to combat record-high gasoline prices during tomorrow’s scheduled meeting with Secretary of Energy Jennifer Grandholm, Reuters reported on Wednesday.
Refining executives reportedly will seek to make the case that an export ban would anger allies and lead to refining production cuts as companies lose access to global markets that have become crucial to revenues, ultimately raising prices.
The U.S. is the world’s biggest exporter of refined products, and Mexico, Canada and Japan are among the top buyers of those partners, while Europe has increased purchases in recent weeks to make up for lost Russian supply.
“If refiners aren’t allowed to export, they’re just going to slow down production and cut the refinery utilization rate,” Mizuho’s director of energy futures Bob Yawger told Reuters, adding that excess products likely would be sent into inventories, which are at multi-year lows.
U.S. capacity to refine crude oil into fuel and other products has dropped below 18M bbl/day to hit its lowest level since 2014, according to the Department of Energy’s latest annual refinery capacity report.