Feb 25, 2014 02:05 am | Leonardo Maugeri
THE
WORLD has been caught by surprise by the United States’ shale-oil boom.
Analysts and experts are still clashing about both its true extent and
the possibility of extending a shale revolution beyond North America. In
just a few years shale oil could make the United States the world’s top
oil producer. But a shale revolution is unlikely in the rest of the
world, due to some unique factors that characterize the U.S. oil and gas
patch. The single-minded focus on the future of shale oil, however,
risks obscuring another evolving dimension of the global oil picture
that defies the past pessimism spread by peak-oil theorists who claimed
that shortages loomed: beyond the United States, the world’s
oil-production capacity is also growing much faster than demand.So far, this imbalance has been offset by two things: continuous outages of existing oil supply affecting several Arab and African countries, and the recurring fears of escalating crises in the Middle East. But supply capacity is bound to grow in the future as well, so that unless demand rebounds strongly in the next few years, a significant downturn of oil prices may well occur. The connections among a number of factors—the U.S. shale boom, the global rise of oil supply, and the inner volatility of oil prices due to temporary outages and political crises—provide a somewhat contradictory picture of the global oil market. These contradictions may, in turn, trigger unexpected changes in the direction of the oil market. All of these changes may have deep and sometimes paradoxical consequences for U.S. energy security.
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