OREANDA-NEWS. The first unlicensed exports of US crude since Congress lifted 40-year-old restrictions may be less about economics and more about establishing relationships and enabling global refineries to test the performance of US crude.

ConocoPhillips and NuStar said yesterday they would have a tanker of light Eagle Ford crude and condensate loaded for export at NuStar's North Beach Terminal in Corpus Christi, Texas, today for sale to trading firm Vitol. With the vessel Theo T setting sail this afternoon for Trieste, Italy, the companies say it will be the first such export since President Barack Obama signed into law a measure repealing export controls nearly two weeks ago.

Vitol will also purchase a cargo from Enterprise Products Partners that is scheduled to load at the Enterprise Hydrocarbon Terminal (EHT) on the Houston Ship Channel in the first week of January, Enterprise said last week. EHT is the former Oiltanking terminal.

The Theo T is loaded with what is known as Eagle Ford Light Common Stream, a blend of processed and unprocessed lease condensate or crude oil with an API gravity between 45° and 55° API.

The economics of sending Eagle Ford crude overseas currently is questionable, with both Nymex WTI and coastal marker Light Louisiana Sweet (LLS) at a premium to Ice Brent. Higher gravity Eagle Ford crude typically prices at a premium to WTI and a discount to LLS, although the market in Corpus has been relatively quiet this week and last, owing to the holidays and the end of the year.

So far this month, Eagle Ford crude has been a theoretical 50?-$1.50/bl more expensive than Algeria's Saharan Blend, delivered to Mediterranean ports like Trieste.

It is fairly typical for marketers to sell a new crude stream at a discount, even for as long as a year, to establish a new market. When the arbitrage to a particular region does open, potential buyers have already been identified and refiners are familiar with the performance of the particular grade. This is what occurred in 2006 when BTC Blend — a grade produced offshore Azerbaijan and piped to Turkey's Mediterranean coast — began to trade.

Beyond economics, there may also be some marketing value to Vitol if it can say it was the firm to make the first US crude exports that did not need a license in 40 years.

Trieste is the starting point for a crude pipeline that takes oil inland to refineries in Austria, Germany and other central European countries. Vitol has a refinery in Switzerland.