A customer pumps gas at a Chevron station over the summer in Mill Valley, California. The GAO recently endorsed the export of U.S. petroleum, saying it will help drive down gas prices.
A customer pumps gas at a Chevron station over the summer in Mill Valley, California. The GAO recently endorsed the export of U.S. petroleum, saying it will help drive down gas prices. - 

A report from the U.S. Government Accountability Office says that lifting 40-year-old restrictions on exporting U.S. crude oil could drive down gasoline prices at home. The idea is that more oil on the world market means lower prices.

However, the report was written more than a month ago — That is, before world oil prices, and U.S. gasoline prices, went down sharply on their own. It's worth asking if those declines change the equation.

In a way, U.S. crude is already affecting world markets, by reducing U.S. imports. That leaves oil exporters like Nigeria looking for takers and lowering their prices. So, do world markets really want U.S. crude right now? 

"Nobody can be certain," says energy consultant Geoffrey Styles. "We’re really exploring new territory here. The new crudes that have brought all this about came to the market when prices were pretty high. These are not-inexpensive crudes to get out of the ground."

So, it might not be worthwhile for U.S. drillers to increase production if world prices stay low.

Which is still an if.

"I don’t think anyone knows what the price of oil will be in a year," says Michael Levi, senior fellow for energy and the environment at the Council on Foreign Relations. "The big news in the oil markets is not just lower prices — it’s the return of volatility, and volatility works in both directions."  

Either way, it’s not an argument for keeping the export ban. "In the worst case," he says, "relaxing the ban doesn't do anything."

 

Follow Dan Weissmann at @danweissmann