Crude oil tanker
Crude oil tankerIsrael news photo: Flash 90

Already lower than it has been in nearly a decade, the price of oil is likely to drop even further.

The United States, now officially the world's largest oil producer, will, for the first time since 1975, allow the export of “made in USA” oil.

Oil producers will be able to export light crude condensate to any country not on a US sanctions list, without receiving a special export permit, as has been the case for the past forty years.

The Department of Commerce on Tuesday reversed the ban on light crude, although retained it for other kinds of oil. Officials said they expected the new rules to increase what exports there had been from the US by at least five times, to start.

A report by analysts at CitiGroup attributed the move to a desire by the government to ensure that the new oil fracking industry was able to withstand by falling oil prices.

“U.S. producers are under the gun to reduce capital expenditures given lower prices,” the report said. “Now an export route provides a new lease on life that can further weaken crude oil markets and throw a monkey wrench into recent Saudi plans to cripple U.S. production.”

Several weeks ago, Saudi Arabia refused to cut its oil production levels, as many members of OPEC were demanding, despite the lower prices and oversupply. Many analysts said that the Saudis were bent on pushing the price of oil even lower, in order to drive American shale producers out of business. The new US regulations will, the analysts said, give the shale industry a much larger market to sell to.