It was only a matter of time. In the wake of the 1973 OPEC oil embargo, the U.S. enacted a law in 1975 that prohibits (with minor exceptions) exporting U.S. crude oil. But as U.S. crude production continues to rise, the inevitable calls for lifting that ban will begin.

The first shot was fired by an editorial in the Financial Times:

In effect, the ban is principally a subsidy to the US refining industry. But it is of little benefit to consumers and threatens to harm North American oil production. It also undermines US credibility with its trading partners. It is long past time that the US embargo was lifted, too.

That the export ban is a boon to refiners is inarguable, but that is only a recent phenomena. We have noted before that refiners stand to dictate the price they will pay for domestic crude so that they can make a profit on exports of refined products like gasoline and, principally, diesel fuel. Gulf Coast refiners like Valero Corp. (NYSE: VLO) and Marathon Petroleum Corp. (NYSE: MPC) and East Coast refiners like PBF Energy Inc. (NYSE: PBF) now have the ability to move crude to their refineries by rail. Even though that costs much more than pipeline transportation, by hard bargaining over the price of crude the refiners can make a tidy profit of around $6 to $7 a barrel. Phillips 66 (NYSE: PSX), with one refinery on the East Coast and three on the Gulf Coast, also stands to prosper.

The Financial Times notes that U.S. consumers “would see no benefit [from a continued ban on crude exports], because oil product exports are unrestricted, allowing refiners to receive world prices for their sales.” That conclusion assumes that refiners will export more gasoline and diesel fuel at higher world prices that will be unaffected by the new product on the market. More refined product on the global market should lower prices for all. Besides, if U.S. refiners get too greedy, they likely would face regulatory restrictions on exports of refined products.

Making the case for lifting the ban on exports means going against all the recent public attention given to U.S. energy security and energy independence. That will be a hard sell in the court of public opinion, but crude producers, including supermajors like Exxon Mobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: CVX), have deep pockets and a lot to gain from being able to export U.S. crude.

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