from the Dallas Fed
The shale revolution has vastly boosted supplies of the ultralight crude oil known as condensate, particularly in the Eagle Ford Shale region of South Texas. Condensate is used to produce a variety of products, often by combining it with heavier types of oil. Supplies have overwhelmed U.S. firms’ capacity to put the condensate to use.
A U.S. ban on oil exports – including condensates – largely prevents the sale of condensate to foreign companies. Drilling companies, refiners and petrochemical producers have employed various ways to deal with the condensate surplus, with some producers skirting the export ban. Regulators have taken notice, too, allowing limited condensate exports by two firms. Still, much uncertainty remains in the marketplace over what form exports of condensate will take.