WASHINGTON—The House voted Friday to lift the 40-year-old ban on oil exports, fueling a clash with President Barack Obama and acting on one of the oil industry’s top congressional priorities.

Lawmakers voted 261-159 to lift a ban Congress first put in place after the 1970s Arab oil embargo that sent domestic gasoline prices skyrocketing. Debate on the issue now shifts to the Senate, where the measure faces steep hurdles to passage.

“The passage of this legislation gets us one step closer to leveling the playing field so that domestic producers can compete in the global marketplace,” said Dave Hager, chief executive of Devon Energy. Devon is part of a coalition of more than a dozen oil companies, including Hess Corp. , ConocoPhillips , and Encana Corp. , which have been pressing the issue with Congress for more than a year.

“This is a vote to level the playing field for U.S. workers and businesses who should be allowed to compete against foreign oil suppliers like Iran and Russia,” said George Baker, executive director of the coalition of more than a dozen oil companies, which also includes Marathon Oil Corp., and Apache Corp.

The companies say allowing oil exports would eliminate market distortions, create jobs and stimulate more U.S. petroleum production, which has increased 80% since 2008 and has helped drive down the global price of oil to half of what it was in the summer of 2014. Lifting the ban also could help companies fetch higher prices.