The US Tight Oil Revolution and Its Impact on the Gulf Cooperation Countries – Beyond the Supply Shock

While the impact of the increase in US production on prices and on oil market dynamics is yet to be fully felt, as some of the underlying forces still need time to unfold and need to be fully understood, it is important to provide a general framework to help us analyse the US shale revolution and its potential impacts on oil markets and key Middle East producers. In this paper, we propose a broad framework based on three main aspects: the US tight oil revolution as a positive oil supply shock – with the potential to transform into a global supply shock if hydraulic fracturing technology successfully diffuses to other parts of the world;  the US tight oil revolution as a force disrupting the existing trade flow patterns of crude oil, petroleum products, condensates, and NGLs; the development of US shale as a powerful force behind the shift in market perceptions, not only from a position of oil scarcity to one of oil abundance, but also as a shift in terms of the USA’s aspiration to achieve energy independence and how this would impact US foreign policy and its relations with other players, including key Middle East oil exporters.

Executive Summary

By: Bassam Fattouh

Latest Tweets from @OxfordEnergy

  • Are Asian LNG Spot Prices Finally Decoupling from Oil? https://t.co/VwFrnNJHUS

    May 20th

  • Vitaly Yermakov quoted on the contamination of the Druzhba pipeline: Transneft was caught off guard because this ha… https://t.co/aOpNycyXbg

    May 19th

  • Natural Gas Vehicles are still increasing worldwide but electric vehicles are increasing more quickly. Do trucks pr… https://t.co/rooCJ7wvra

    May 14th

Sign up for our Newsletter

Register your email address here and we will send you notification of new publications, comment, articles etc. automatically.