In a sign that U.S. has re-emerged as a world-leading oil producer, the Obama administration has cleared the way for the first exports of unrefined American oil in nearly four decades, according to a recent article in the Wall Street Journal.

The Commerce Department recently gave Pioneer Natural Resources Co. and Enterprise Products Partners LP permission to ship a type of ultralight oil known as condensate to foreign buyers. The buyers could turn the oil into gasoline, jet fuel and diesel, the Journal reported.

“For now, the rulings apply narrowly to the two companies, which said they sought permission to export processed condensate from south Texas' Eagle Ford Shale formation,” the Journal wrote. “The government's approval is likely to encourage similar requests from other companies, and the Commerce Department is working on industrywide guidelines that could make it even easier for companies to sell U.S. oil abroad.”

Under rules imposed after the Arab oil embargo of the 1970s, U.S. companies can export refined fuel such as gasoline and diesel but not oil itself except in limited circumstances that require a special license. The embargo essentially excludes Canada, where U.S. oil can flow with a special permit.

“But as drilling companies tap shale formations across the U.S., so much oil is flooding out of the ground that prices for ultralight oil have fallen as much as $10 or more below the price of traditional crude. As a result, producers have lobbied aggressively to relax the export ban, saying they could get a higher price from foreign buyers than from U.S. refiners,” the Journal reported.

To read the Wall Street Journal article, click here.