Unlocking the shale potential: examining the effects on oil prices and the potential for global adoption

Md. Raghib Nadeem and Shujaat Naeem Azmi

Cogent Economics & Finance, 2024, vol. 12, issue 1, 2402029

Abstract: Over the last decade, a significant concern in the energy market has been the decline in the USA’s oil imports and fall in energy prices. In this context, we investigate the impact of the shale revolution in the USA on oil prices and examine its potential replicability in other shale-rich countries. Employing the Auto Regressive Distributive Lag Model (ARDL), the influence of the shale energy boom on WTI oil prices has been quantified, using monthly time series data from 2008 to 2019. The results reveal that shale oil output has no effect on oil prices in the short run. However, we found a significant negative impact on oil prices in the long run, as shale development enhances the global energy supply. Additionally, we found that the shale rich countries lack the infrastructure, financing, and have limited property rights, which hampers their chances of replicating the success of shale development in USA. We recommend that countries trying to develop shale resources invest in factors that led to the shale revolution in the USA. Additionally, as low oil prices will reduce future investment in shale oil and gas exploration, the US government should offer adequate incentives for private firms to remain competitive in the energy sector and continue enjoying the benefits of the shale revolution.The paper “Unlocking the Shale Potential: Examining the Effects on Oil Prices and the Potential for Global Adoption” offers critical insights into the transformative impact of the shale revolution on the U.S. energy landscape and global oil markets. Through the utilization of the Auto Regressive Distributive Lag (ARDL) model and an examination of more than ten years of data, this research highlights the crucial role played by U.S. crude oil output and OPEC’s oil supply tin driving down the global oil prices. The results draw attention to the possible financial implications associated with prolonged low oil prices, especially in terms of deterring future investments in shale oil exploration. Additionally, this study provides a roadmap for other countries with untapped shale reserves to contribute to global energy security and price stabilization by examining the possibilities for shale technology adoption on a worldwide scale.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/23322039.2024.2402029 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:oaefxx:v:12:y:2024:i:1:p:2402029

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/OAEF20

DOI: 10.1080/23322039.2024.2402029

Access Statistics for this article

Cogent Economics & Finance is currently edited by Steve Cook, Caroline Elliott, David McMillan, Duncan Watson and Xibin Zhang

More articles in Cogent Economics & Finance from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().