Swiss commodities house Trafigura will ship one of the first cargoes of benchmark US crude oil to Israel in the coming weeks, as the end of a decades old export ban lets American oil flow to international markets, The Financial Times reported.

Shipping West Texas Intermediate to Israel is profitable due to a glut of oil, which has pushed storage capacity at the crude’s main storage hub close to its limit, and so may relieve downward pressure on the most actively traded US oil contract, which has fallen to a 12-year low.

The move also represents vindication for the oil companies and politicians that lobbied for the lifting of the US export ban — a legacy of 1970 Arab oil embargoes — arguing it would give Israel and European allies an alternative to Opec and Russia.

The 700,000 barrel cargo is expected to be part of a flotilla of vessels booked this week to carry the first overseas shipments of WTI since the 1970s.

Stocks at the giant storage hub of Cushing, Oklahoma — known as the “Pipeline Crossroads of the World” and the delivery location for the WTI contract — have hit record levels, attracting nimble traders.

“Trafigura has sold prompt loading WTI to the Israeli refining system,” said Ben Luckock, Trafigura’s global head of crude oil.

Mr Luckock said it was currently profitable to ship WTI to Europe and Israel for contracts due to be delivered in March. “We believe a number of vessels of WTI crude oil have recently been fixed to Europe.”

Source: MENA