Behind the Money

How shale rewrote the global oil order

May 1, 2024

Exploring how US shale has disrupted the global oil market dominated by the Middle East, impacting oil prices and geopolitical dynamics. Discussing the sustainability of US shale production amidst conflicts and the implications for the future of the global economy.

17:41

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Quick takeaways

US shale production has shifted global oil dynamics away from the Middle East.

Shale revolutionized oil industry with hydraulic fracturing, making US the largest oil producer globally.

Deep dives

Shift in Global Balances Due to Shale Production

The 1970s saw the Middle East as the primary oil-producing center, leading to global reliance on countries like Saudi Arabia and Iran. Turbulent events in the Middle East caused oil prices to skyrocket, impacting the global economy. However, recent conflicts, such as the Iran-Israel tensions, failed to significantly impact oil prices due to the rise of US shale production. The dominance of US shale has shifted the global oil market dynamics, reducing the influence of the Middle East.

Introduction

2min

The Rise of US Shale: Transforming the Global Oil Market

7min

Impact of America's Shale Production on Global Oil Prices

2min

Factors Influencing Oil Prices and the Role of US Shale

5min

The Future Implications of Shale Revolution on Geopolitics and the Global Economy

3min

For decades, countries in the Middle East have dominated the oil market, pumping large quantities of the world’s supply. Along with that has come a pattern: when there’s conflict in the region, oil prices rise. The pattern seems to be breaking though, mainly because of one thing: US shale. The FT’s Myles McCormick explains how production in the country shifted oil’s epicentre away from the Middle East, and how long that may last.

Clips from Al Jazeera, CBS, CNN

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For further reading:

How US shale keeps sheltering America from the next oil price surge

On markets and geopolitics, it is a mistake to forget about shale

Why oil prices remain steady even as Middle East tensions escalate

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On X, follow Myles McCormick (@mylesmccormick_) and Michela Tindera (@mtindera07), or follow Michela on LinkedIn for updates about the show and more.

Read a transcript of this episode on FT.com

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