Tight restrictions on US crude oil exports, in place for 40 years, would be lifted as part of a budget deal agreed in Congress on Tuesday evening.
The deal presented to Republicans in a late-night meeting by House Speaker Paul Ryan would also increase spending on defence and a number of domestic programmes.
Moreover it would avoid a government shutdown that had been looming as soon as Wednesday.
President Barack Obama’s administration has expressed opposition to relaxing the controls on crude exports, but he is seen as likely to accept a broad spending bill that also includes liberalisation of oil sales.
The crude export restrictions were introduced in 1975 to support the price controls put in place as a response to the oil crisis of 1973-74.
They remained in place even after those controls were scrapped in 1981.
Removing the curbs was a policy priority for US oil producers struggling after the plunge in crude prices since the summer of last year.
The industry has argued that allowing free trade in oil would boost US production, investment and jobs.
Analysts say large volumes of crude are unlikely to flow out of the US as soon as the restrictions are lifted.
The spread between the price of West Texas Intermediate crude, for delivery in Oklahoma, and internationally traded Brent is only about $1.25 per barrel, meaning that any benefit for US producers from selling in world markets would be swallowed up in transport costs.
In the long term, however, the liberalisation of exports will help companies producing in the US by enabling them to find the most profitable markets for their oil.
The curbs on oil exports have been eased in recent years, but the US exported only 409,000 barrels of crude per day in September, just 4 per cent of its total production.
The budget deal marks a big victory for Ryan, a former vice-presidential candidate who, since taking over as speaker last month, has made ending the gridlock in Congress a priority and promised a new pragmatism.
“That’s the way I think Congress ought to run,” he told an event earlier on Tuesday. “Let’s get back to legislators legislating. Let’s get back to actually doing things methodically, deliberating. We call this regular order around here — I call it democracy.”
The plan presented late on Tuesday calls for Congress to vote within days to approve an omnibus budget bill and a separate tax bill extending a series of tax credits that were set to expire.
Those credits include support for wind and solar power, which expired at the end of last year or are set to expire at the end of next year.
Jason Bordoff, a former adviser to Obama who runs the Center on Global Energy Policy at Columbia University, said: “It’s not every day that a compromise across the political aisle actually yields two good policies, but this is one of those cases. Free trade in oil plus more support for clean energy: that’s a very positive outcome.”
The $1.1tn spending deal came after weeks of contentious negotiations and the final package is expected to run to thousands of pages.
It still faces a few final hurdles. Some Republicans and Democrats expressed scepticism about the deal.
To avoid a shutdown and buy more time, Congress was expected to pass a short-term funding extension to run until December 22.
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