OREANDA-NEWS. Fitch Ratings believes that last week's decision by the U.S. Commerce Department to swap up to 100,000 barrels a day of light oil and condensate for heavy Mexican crude does not signal a change in policy toward the crude export ban, and the removal of the crude export ban in the U.S. is not likely to take place in the near term. The swap, along with earlier administrative decisions that allowed for limited exports of condensate, constitutes modifications around the edges of the policy. Fitch believes removal of the ban is not likely to become a concern until after the next election cycle, and even then, significant political hurdles stand in the way of it being fully recalled.

The effects of lifting the crude export ban would vary depending on subsector. E&P companies with substantial onshore production and exposure to the most bottlenecked oil-rich shale plays would be the largest beneficiaries. Refiners are likely to see the most negative financial impacts from the removal of the ban as the deep discounts that North American crudes have to world grades would narrow. However, the ratings impact on refiners is likely to be limited, as Fitch rates refiners using normalized midcycle margin assumptions.

Lifting the ban would have mixed impacts for midstream sectors, including pipelines, storage and crude logistics. Certain terminals and storage may benefit as the demand for moving crude to the coasts rises. However, refined product pipelines could see this benefit offset if crude discounts narrow and refinery utilization drops from currently robust levels. Logistics associated with moving shale crudes to U.S. refineries are also likely to be negatively affected. This would potentially include rail assets and Jones Act shipping.