WASHINGTON — The United States should consider allowing “strategic” crude exports to allies abroad while renegotiating the nuclear deal with Iran, Sen. Robert Menendez said.
The New Jersey Democrat’s comments, part of a speech Tuesday at Seton Hall University to explain his opposition to the agreement, marked a shift in his approach to oil exports. Menendez historically has opposed moves to loosen the longstanding ban on exporting U.S. crude.
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But on Tuesday, Menendez highlighted oil exports as a geopolitical tool — a way for U.S. oil to compete in markets that might be customers for Iranian crude if the nuclear accord is finalized and sanctions against the country are lifted.
He cast the limited oil exports as an extra bargaining chip for the United States in renegotiating “a critical few issues” with Iran.
“We should . . . consider licensing the strategic export of American oil to allied countries struggling with supply because Iranian oil remains off the market,” Menendez said.
Lawmakers are weighing whether to approve the nuclear agreement in September. Menendez is now the second Senate Democrat to come out against the pact, following a declaration by Sen. Chuck Schumer of New York earlier this month.
Menendez described his wariness about Iran’s desire for nuclear power by noting the country’s rich energy bounty. Iran “has the the world’s fourth-largest proven oil reserves, with 157 billion barrels of crude oil, and the world’s second-largest proven natural gas reserves with 1,193 trillion cubic feet of natural gas,” Menendez said.
The U.S. government’s Energy Information Administration has predicted Iran has the technical capability to churn out at least 700,000 barrels of crude per day by the end of 2016, if sanctions are lifted. Iran could move even faster to sell oil in storage — potentially 30 million barrels of it.
Some oil export advocates have argued that the potential surge of Iranian crude is a compelling reason to overturn the U.S. trade restrictions. Sen. Lisa Murkowski, R-Alaska, once dubbed the oil export ban a sanction against ourselves.
Existing U.S. trade policy allows widespread exports of refined petroleum products, such as gasoline, diesel and jet fuel. Exports of most raw crude have been blocked since 1975, but there now are exceptions for some Californian crude, oil extracted in Alaska and shipments to Canada.
The Obama administration also has ruled that an ultra light oil known as condensate qualifies as an exportable petroleum product as long as it has undergone some distillation. Last year, Menendez challenged the move, calling it an unauthorized policy change by the Commerce Department.