New Jersey Senator Robert Menendez and Massachusetts Senator Edward Markey said recent action by the department's Bureau of Industry and Security (BIS) that paved the way for oil companies to export a lightly processed oil known as condensate has caused U.S. oil prices to lose their discount relative to world prices, the impact of which will be felt by American consumers.

"We believe we should vigorously preserve the oil export ban and ensure American oil prices are as low as possible and not pursue policies that will narrow the gap between American oil prices and world oil prices," the senators wrote.

On Dec. 30, the BIS said it had granted permission to "some" companies to sell lightly treated condensate abroad and issued formal guidance to explain what kind of oil was generally allowed under the existing ban, giving some clarity to would-be exporters.

The senators said the price of West Texas Intermediate crude oil over the last five years has consistently been $5 to $10 cheaper than the price of global benchmark Brent crude to the benefit of American consumers.

The senators, both longstanding opponents of expanding crude oil exports, had previously pressed the Commerce Department to provide details about their decision to allow two companies - Enterprise Product Partners LP (>> Enterprise Products Partners L.P.) and Pioneer Natural Resources Co (>> Pioneer Natural Resources) - to export condensate from their Texas fields after only minimal processing.

Shell last week disclosed it has also received permission to export lightly processed condensate.

Menendez and Markey also argued that the Commerce Department should not have made these changes without a formal rulemaking process that allows for public comment.

(Reporting by Valerie Volcovici, editing by G Crosse)