The U.S.’s crude oil policy

It’s true that forcing U.S. crude oil producers to sell exclusively to domestic refiners translates into lower crude prices in some parts of the country. Those lower prices, though, mean fewer rewards flow to the energy-production sector, which has supported jobs and communities where few might otherwise be. And lower crude prices in a few places don’t mean significantly lower gasoline prices for Americans. Refineries, not drivers, buy crude oil and then make it into gasoline and other products. These products trade on world markets and generally reflect the world crude price. The big winners of the current restrictive export policy, then, are refiners who buy their crude at locked-in U.S. prices and sell their gasoline at something closer to a global price. Consumers would benefit through expanding U.S. oil production, allowing U.S. crude to go the refineries that most want it, promoting stability in the global crude oil supply and, perhaps, putting some downward pressure on global prices.

Even if prices didn’t change much, it wouldn’t matter: The government doesn’t have a compelling interest in nudging down the price of high-polluting gasoline, and certainly not through trade policies that put absurd restrictions on energy flows and hurt American producers.

If national security were in danger, the government could shut off exports. If anything, the United States’ continuing export restrictions diminish the country’s credibility when it asks other nations to adopt rational policies that rankle economic nationalists. Congress should let the country participate fully in the international oil market.