Policy Briefs
The US Fracking Boom, Oil Prices and Policy Options for Arab Oil Producers
No.
20
Date
October, 2016
Topic
P2. Socialist Systems and Transitional Economies
Q3. Nonrenewable Resources and Conservation
In a Nutshell
- In the absence of the US fracking boom, the global price of crude oil since 2011 would have been as much as $10 per barrel higher.
- This effect pales in comparison with the decline in the oil price that took place after June 2014, to which shale oil contributed little.
- Given the likelihood of persistent low oil prices, fiscal retrenchment looks essential for Arab oil-exporting countries. A natural starting point would be phasing out domestic subsidies on energy consumption.
Authors
Romesh Vaitilingam
Economics writer