President Barack Obama has threatened to veto legislation to lift the decades-old ban on U.S. crude oil exports, despite pushing for an end to economic sanctions on Iran that would allow the OPEC member to ship oil abroad.
Republicans are moving an oil exports bill through Congress, and despite some hang-ups over a pro-union provision of the bill, which is likely to soon pass the House. But even if both chambers pass the oil exports bill, Obama has said he will veto it.
“Legislation to remove crude export restrictions is not needed at this time,” the White House said in a statement. “Rather, Congress should be focusing its efforts on supporting our transition to a low-carbon economy.”
“It could do this through a variety of measures, including ending the billions of dollars a year in Federal subsidies provided to oil companies and instead investing in wind, solar, energy efficiency, and other clean technologies to meet America’s energy needs,” the White House added.
Obama’s opposition to oil exports, however, comes as his administration is finalizing a deal to end economic sanctions against Iran. The deal would allow Iran to continue developing its nuclear program and also allow the country to start putting oil back onto international markets.
Iran has the world’s fourth-largest oil reserves, and is producing about 2.8 million barrels per day. But once sanctions are lifted, energy analysts expect the OPEC nation could put up to one million barrels of oil per day on the international scene. Iran’s oil minister wants to export 1.5 million barrels a day by the end of 2016.
“Around the end of next year we will be close to this figure,” Bijan Zanganeh, Iran’s oil minister, told CNN earlier this month.
Iranian oil flooding the market would put further downward pressure on global crude prices, which could add more pain to U.S. producers who want oil prices on the uptick so they can begin ramping production again.
Since the 1970s, U.S. oil companies have been prohibited from shipping oil out of the country. The rules were put in place in response to the Arab oil embargo which contributed to massive fuel shortages. But that was before shale, argue Republicans.
“Study-after-study has shown that lifting the ban on crude oil would lower prices at the pump, support the creation of an average of 394,000 jobs and generate hundreds of millions of dollars in economic benefits,” said Rep. Fred Upton, a Michigan Republican.
Upton also pointed out that the White House’s veto threat contradicted Obama’s call for an “all-of-the-above” energy policy.
The House is set to vote on the oil exports bill Friday.
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