by Mitch Kokai
Senior Political Analyst, John Locke Foundation
“If we allow oil exports, the price received by U.S. producers will rise, which will lead to more production—meaning more employment and investment. Permitting the export of oil will actually reduce the price of gasoline.
“Oil that’s made into gasoline is oil that’s [largely] imported. It’s tied to Brent [crude], the world benchmark, which is $5 to $10 higher than U.S. oil in West Texas. U.S. exports would raise the supply of Brent. The same demand and a larger supply means a lower price. It’s the rare policy that stands a good chance of benefiting producers and consumers.
“Exports will create the need for infrastructure, which will create jobs. Optimists think this could mean as much as 1 percent more GDP by the end of this decade. To generate just half a percent more with fiscal policy would require an extra $60 or $70 billion a year. That’s not likely to pass, and if it did it would have substantial debt consequences.
“A lower trade deficit will mean a stronger dollar, will mean lower-priced imports, which will make America richer. As an oil exporter, we’ll have the kind of leverage other oil exporters wield. By producing more oil and exporting it, we put downward pressure on prices, which is the most important sanction we can engage in with response to Russia and the Middle East.”