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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Put yourself in US President Donald Trump’s shoes. Your voters are wrestling with petrol prices that have soared above $4.50 per gallon. You know your country makes more oil than it consumes. And you just returned from a trip to China, a country that appears to outsiders to have turned central planning into economic abundance. What would you do?
If the answer is “stop exporting”, not so fast. While the US did have a crude oil export ban in place until 2015, officials have so far rejected the idea that the US could stop selling crude oil and related products on world markets in a bid to lower prices at home. Nonetheless, as prices remain stubbornly high, it’s worth considering what a ban on exports would look like, and why the maths that seem to favour it really don’t.
The US is only a net exporter because its fields produce a lot of natural gas liquids — stuff such as ethane and propane — which it largely ships abroad, and which are included on a barrel-equivalent basis in official numbers. These are valuable as petrochemical feedstocks and are blended into fuels. But they cannot be used to produce petrol, diesel or jet fuel. Stripping them out, the US surplus disappears.
The US is actually a net importer of crude oil, to the tune of more than 2mn barrels a day in 2025 according to Wood Mackenzie. But in practice, it has to import about three times that. Because its refineries are ill-suited to the light, sweet oil its fields produce, the Energy Information Administration reckons last year it brought in more than 6mn barrels a day of heavy oil — in large part from Canada — and exported 4mn of its own.
Shunning global markets, then, would require striking a bilateral deal with Prime Minister Mark Carney. The US could try to secure Canadian supplies at below-market prices, perhaps in exchange for some off-market cashback. Canada does not have easy export alternatives. Then again, Trump has not done much so far to win Carney’s goodwill.
Assuming crude oil could be secured off-market, US refineries would then produce more than the country uses: net exports of finished products are more than 1mn barrels a day. But would-be central planners would still need to sharpen their pencils because that surplus isn’t spread uniformly across the different fuels. In particular, the US is a net importer of petrol and a net exporter of diesel, implying an entire host of transactions that would need to be somehow carried out without affecting domestic prices.
And this exercise wouldn’t just be extremely complex: assuming overall exports from the US would decline, it would impoverish the rest of the world and expose the country to retaliation on — say — critical minerals, where Uncle Sam is more vulnerable. Attempting to exploit the US’s energy dominance will get more and more tempting as the Iran conflict drags on, but there is a reason it has thus far stayed an idea and not become a reality.
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