The Obama Administration has taken a bold step toward loosening the grip of tense geopolitics on oil prices, reports the Wall Street Journal (paywall), giving the first permission in four decades for the export of unrefined American oil. The decision—not made public but announced in the form of private letters from the US Commerce Department to two oil companies, according to the paper–seems certain to cause a stir in global oil markets and perhaps send prices lower.
Global oil prices have surged because of the political turmoil in the Middle East and Africa–the march of Islamic militants in Iraq, the stoppage of oil exports from Libya, and the broad turbulence in Nigeria. In all, the politics there and elsewhere have taken some 3.5 million barrels a day of oil production capacity off the market, out of the 90 million barrels a day consumed globally.
The US decision allows two Texas companies—Pioneer…
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