In the letter to the US Department of Energy signed by Exxon CEO Darren Woods, the company said tightening fuel export shipments would put pressure on global supplies and raise fuel prices in the US.
The letter stated: "Continuing current Gulf Coast exports is essential to efficiently rebalance markets—particularly with diverted Russian supplies. Reducing global supply by limiting US exports to build region-specific inventory will only aggravate the global supply shortfall."
A US Department of Energy told WSJ parts of the US have "unacceptably" low levels of oil and gas supply at or near five-year lows. President Joe Biden's administration is pushing for the oil and gas industry to ensure adequate supply across the US.
However, Exxon said easing exports will not help meet the supply glut in the northeastern US, but would lead to refineries cutting their output.
The Russia-Ukraine war triggered a surge in oil prices, with EU sanctions expected to continue to reduce Russian oil export volumes into 2023. Oil prices have seen a pullback in the past few months due to a slowing global economy, but this is not likely to last longer with the ending of oil releases from the U.S. strategic petroleum reserve. Both OPEC and IEA do not expect a major drop in global oil demand.
Exxon added that the Jones Act also restricts supply of fuel to the supply-stricken northeast US. The law effectively limits the vessels moving goods between US ports. The Biden administration issued a temporary waiver of the law earlier in September to send diesel to Puerto Rico.