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The shale boom in the US has redefined global energy geopolitics. By becoming nearly energy independent through fracking technology, the US reduced its oil imports and demand on the global market. This led to a supply glut and plunge in oil prices, destabilizing economies of OPEC countries that rely heavily on oil exports like Saudi Arabia, Venezuela, and Iran. Meanwhile, the US economy benefited from increased energy production. The shale boom has shifted the balance of power away from OPEC and towards new players like the US.

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Ansh Gupta
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50 views21 pages

Final

The shale boom in the US has redefined global energy geopolitics. By becoming nearly energy independent through fracking technology, the US reduced its oil imports and demand on the global market. This led to a supply glut and plunge in oil prices, destabilizing economies of OPEC countries that rely heavily on oil exports like Saudi Arabia, Venezuela, and Iran. Meanwhile, the US economy benefited from increased energy production. The shale boom has shifted the balance of power away from OPEC and towards new players like the US.

Uploaded by

Ansh Gupta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

Global exploitation of shale oil and gas will redefine the

geo-politics of Middle –East and the World

By: Apoorva Bhushan and Ansh Gupta


Netaji Subhas Institute of technology
What is shale gas?
Sedimentary Rocks
Formed due to compression of
mud and minerals
Extracted using fracking
technology
Stimulates flow through the
non- porous rocks by fracturing
those using pressurised liquids
Genesis of Technology

Technology has been in the


industry since 19th century.
Was much more expensive until
very recently.
Technological advancements by US
Made the extraction commercially
and economically viable
Scenario before the Shale Boom
Since the 1930s, the global energy market has been controlled
by Russia and the OPEC.

Dictated prices politically


Forced investors into contracts
Oil has been the cause for
numerous wars
Consumption Pattern

US tops the list of


countries when it
comes to energy
demand

Consumes nearly three


times that of China
US and the shale boom
• US demand for oil suddenly reduced to a great
extent.
• Ban to export oil was lifted

• Dwindling demand was met with increasing


oversupply.

• Prices plunged and revenues fell to an all time


low for oil producing regions.
Attempt to back fire
In November 2015, OPEC
announced it was unwilling to cut
down production.
Mainly Saudi Arabia involved.
Richest among all and could bear
the pain of dwindling prices.
Attempted to keep its global share
intact but failed.
US innovated and survived at even
$50 per barrel.
The
Venezuela interdependent
economies
Qatar

Saudi
Arabia

Iran
The Ride down
Saudi Arabia announced a fiscal
deficit of $100 billion, severe cuts in
bonus and increments
Venezuela: Revenue dropped by
60%, Two month emergency period
Qatar: utility rates hiked, Qatar
museums and Aljazeera told to cut
expenses
Iran sanctions lifted, will add to
oversupply
USA
Major importer to near self
sufficiency, boost to
economy
Imports dropped
Excess natural gas to be
imported as LNG
Asia and Europe, target
markets
Creation of jobs
Russia
Wants to stabilize oil
market
Vast reserves and
Efficient transport
network no longer
working
Advantage of high
cost of export from US
China
Shale boom not expected despite
huge reserves
Unfavourable geographical
conditions
Unsuitable topography for drilling
Accused of providing self-subsidies
Wants to replace European market
European Union
Relies on Russia heavily for
resources
Bulgaria, France banned
fracking
Britain, Poland face protests
Risk to environment-water
contamination, earthquake
Supportive new PM of UK
Conclusion
and
future implications
• Disengagement of US from matters
beyond its boundaries, particularly
Middle East
• Destabilising effect on the population of
gulf countries
• Need some real socio-economic reforms
• Underdog producers might just
make it to the top
• Gulf economies need to diversify
• Growing importance of the third world
countries

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