At least one kind of free trade is working out for the US—since the country ended a ban that blocked exports of crude oil to most countries, global sales have popped despite low prices.
In May of this year, the US exported more than one million barrels of crude oil every day, which is a record. It’s also far less than the biggest exporter Saudi Arabia, which delivers more than seven million barrelsto the global markets daily.
The US ended exports in 1975, in response to the energy crisis and the embargo imposed by a then-young Organization of Petroleum Exporting Countries (OPEC), with an exception for Canada. The goal was to keep gasoline prices in the US as low as possible. But, by 2012, the arrival of the so-called fracking boom and commensurate increase in domestic production of oil and natural gas made the US the largest producer of fossil fuels in the world. Congress voted to end the export ban beginning in 2016, and sales have begun to increase as foreign markets purchased US crude.
Now, it’s not just Canada. China and Europe are stepping up to purchase large quantities of US petroleum, which tends to be lighter and thus cheaper to refine. The 2017 figure in this chart is only through May, so total crude exports are set to break a record this year:
That increase in crude exports has led to investments that have helped cushion states like Texas suffering from job losses caused by the bottoming out of oil prices that began in 2014. That plunge has left many of the shale gas plays that drove US production unprofitable. In mid-2014, US oil sold for more than $100 a barrel. Today, it sells at a little more than $40.