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 U.S. bombs blasted Islamic State positions in Syria for a second
day on Wednesday. Militants have been funding their efforts in part
by seizing a dozen or so oilfields in Syria and Iraq, controlling
refineries and smuggling oil and fuel to nearby markets.
In the United States, fracking and other advanced drilling
techniques have helped push U.S. oil production to the highest level
since the 1980s. That has led to a glut of light oil that many
refiners are not able to process, and a call by some lawmakers to
relax or lift the 40-year ban on oil exports.
"The historic growth in U.S. oil production could easily make up the
shortfall to global oil markets," if Islamic State facilities are
wiped out, said a report released by Alaska Senator Lisa Murkowski,
the top Republican on the chamber's energy committee.
Murkowski and other supporters of lifting the export ban have also
urged using U.S. oil supplies to pressure Russia over its
intervention in Ukraine. Russia is a major producer and exporter of
oil and a top supplier to Europe.
It is unclear exactly how much oil production is in control of
Islamic State militants. The output appears to be less than 100,000
barrels per day, Adam Sieminski, head of the U.S. Energy Information
Administration, told the North Dakota Petroleum Council at its
annual meeting on Wednesday.
Sieminski's office, part of the Department of Energy, and the State
Department are working on getting more precise numbers, he said.
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The amount, however, is very small compared with the global market
of about 90 million barrels per day. And concerns about oil prices
damaging the world economy have ebbed for now. Brent crude oil
prices, a global benchmark, hit 2-year lows of $96 per barrel on
Wednesday.
Still, the world's spare oil capacity, or the amount crude producers
can quickly bring on line without major investments, is only a few
million barrels per day and is held mostly in Saudi Arabia.
The Obama administration opened a crack in the crude oil export ban
earlier this year with two approvals to ship minimally processed
light oil known as condensate, but such approvals have been put on
hold since then.
(Reporting by Timothy Gardner in Washington, additional reporting by
Ernest Scheyder in Dickinson, North Dakota, editing by Ros Krasny
and Gunna Dickson)
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