BHP to Be the First to Sell U.S. Oil without Washington’s Consent

BHP to Be the First to Sell U.S. Oil without Washington’s Consent

BHP Billiton Ltd, the Anglo-Australian mining company, is going to become the first firm to export lightly processed ultra-light oil from the United States without an explicit permission of Washington. The company is thus further challenging the limits of the ban on foreign trade of U.S. oil only eight months after the other two U.S. companies confirmed that they had obtained a formal permission to sell U.S. condensate in global markets.

BHP says that their oil also meets legal criteria for export as it is minimally distilled. A BHP spokesperson commented that “the company had taken necessary time to thoroughly examine the issues involved and to ensure that the processed condensate was eligible for export”. Allegedly, the company has moreover already contracted to sell 650,000 barrels of oil to Switzerland’s Vitol, which is the biggest oil trader in the world. The BHP however refused to reveal any details as to the volume, value, and the exact destination of the intended exports. Interestingly, Vitol’s CEO, Ian Taylor, said earlier this week that Europeans should put more pressure on the Americans to further expand and eventually end their crude oil export ban. “There’s no doubt there’s going to be more and more lobbying for the free flow of crude oil,” Mr. Taylor added but also refused to comment on the alleged business with BHP.

BHP’s move surprised analysts, who envisaged that other companies would be hesitant to challenge the regulatory uncertainty orbiting the export ban and its exceptions. Many thought that other companies would wait for clear legal framework rather than face the risk of financial penalties. However, the BHP’s decision to try its luck in international markets comes in favorable political times. In the U.S., mid-term elections have put Republicans in control of both houses of Congress, which is supposed to speed up the process towards ending the ban.

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