The US Fracking Boom, Oil Prices and Policy Options for Arab Oil Producers - Economic Research Forum (ERF)

The US Fracking Boom, Oil Prices and Policy Options for Arab Oil Producers

Romesh Vaitilingam


Date:
October, 2016

NO.
20

Length:
7 pages

Topic:
Q3. Nonrenewable Resources and Conservation
P2. Socialist Systems and Transitional Economies

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.

Romesh Vaitilingam


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