- The "fracking" revolution has led to an excess supply of light crude oil in the United States, particularly in the Midwest.
- These excess supplies of light crude oil, combined with a US ban on exporting crude oil and transport bottlenecks, have led to sharply reduced crude oil prices in the Midwest.
- These lower crude oil prices in the Midwest do not seem to have resulted in lower prices for refined products in the Midwest.
- US refineries are better suited to process heavy crude oil, while refineries in other countries are better suited to process light crude oil.
- As a result, lifting the ban on US crude oil exports would allow for a more efficient distribution of crude oil among refineries in the Western Hemisphere and elsewhere in the world.
- A better allocation of refinery activity will result in more gasoline production, which will lower gasoline prices.
Charles Mason is a university fellow at RFF. He is an internationally known scholar who specializes in Environmental and Resource Economics
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