The US Tight Oil Revolution – What Kind of a Revolution?

The recent growth in US oil output has been impressive. From a negative annual growth in 2008, the US added around one million b/d in liquid production in 2012 with similar growth expected for 2013. Looking at global oil supplies from the US perspective gives the impression of plenty. However, in this presentation, Dr Fattouh argues that there is a risk in building one’s analysis on US developments alone. So far, the US contribution to global oil supplies has been camouflaged by the poor supply prospects in non-OPEC supply outside the US which still suffer from high decline rates, project delays, cost overruns and geopolitical outages. Having said that, one should not look at the developments in the US only in terms of a positive supply shock. The growth in US oil output has changed the perception of markets from oil scarcity, a few years ago, to oil abundance. It has also changed the dynamics of trade flows, with traditional exporters to the US forced to find new markets for their crude oil, with implications on oil price levels and differential dynamics.  Also for the first time in years, US policy matters specifically with regard to its policy concerning exports of crude oil and natural gas. Finally, the way the US perceives itself vis-à-vis the rest of the world could change if the US thinks it could achieve energy independence.

By: Bassam Fattouh

Latest Tweets from @OxfordEnergy

  • An OIES study (Saudi Arabia: Shifting the Goal Posts) cited in a new article in The Economist on OPEC long-term all… https://t.co/K1iuNCK1b4

    February 23rd

  • Heightened Geopolitical Risks in the Middle East and Potential Impacts on Oil Markets https://t.co/ur8Q0PxXit

    February 22nd

  • A new OIES paper on evolution of Japanese oil industry: Considering that demand for refined petroleum products will… https://t.co/jwajCfNQI4

    February 20th

Sign up for our Newsletter

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