Sep 30, 2022 (PressReach.com via COMTEX) -- According to the letter seen by The Wall Street Journal, Exxon Mobil /zigman2/quotes/204455864/composite XOM -0.35% has cautioned against attempts to restrict petroleum exports by the White House administration. As a result, Exxon Mobil stock surged in the market.
Exxon Mobil ( NYSE:XOM ) CEO Darren Woods sent a letter to the US Department of Energy, warning that limiting the company’s ability to export petroleum would increase worldwide demand for the commodity, driving up prices in the United States.
There was a declaration in the letter: “To effectively rebalance markets, it is crucial to maintain present Gulf Coast exports, especially in light of diverted Russian supply. Restricting US exports to stock up on supplies in other regions would worsen the global supply shortage.”
The US Department of Energy informed WSJ that oil and gas supplies in several US regions are at or near five-year lows, calling the situation “unacceptable.” The government of President Joe Biden is working with the oil and gas industries to guarantee sufficient supply throughout the United States.
But Exxon Mobil claimed that reducing exports would cause refineries to reduce production, making the supply glut in the northeastern United States much worse.
Oil prices spiked in response to the conflict between Russia and Ukraine, and analysts predict that EU sanctions will continue to limit Russia’s ability to export oil far beyond 2023. As the global economy has slowed, oil prices have fallen. Still, this trend is unlikely to continue now that the United States has stopped releasing oil from its strategic petroleum reserve. Neither OPEC nor the IEA anticipates a significant global oil consumption slowdown.
Exxon Mobil noted that the Jones Act exacerbates the gasoline shortage in the northeastern United States. As a practical matter, the regulation restricts the number of ships that may transport commodities between American ports. Earlier in September, the Biden administration authorized temporary permission to allow diesel to be sent to Puerto Rico.
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Author: Shariq Khan
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