The paper aims to study the impact of shale gas revolution on the geopolitics
of Middle East and the world. Shale gas refers to natural gas trapped in deep
rocks that is extracted using a method called ‘fracking’. Though the method has
been in use since the 19th century, the recent technological advancement by US
has made it economically viable. The paper examines how it transformed the
global energy market and also tries to predict what lies ahead.
In 2014-2015, international oil prices approximately halved, driven by
oversupply. For Russia and the OPEC countries it implied a period of falling
revenues and mounting fiscal deficits. Saudi Arabia's income fell by 23% last
year. Venezuela was badly hit, forcing the government to announce a 60-day
economic emergency. Qatar and Oman borrowed $5.5B and $1B loans
respectively. OPEC has little real power to hold members to their quotas and
clearly refused to decrease production in order to drive high cost producers out
of the business. Increasing interest of UK in the industry is worth billions of
pounds and could create approximately 60,000 jobs.With the booming US shale
industry showing little signs of slowing, there are good reasons to suspect that
the current slump in the oil price will continue for some time.US
giant Schlumberger announced 9,000 job cuts, around 8% of its workforce.
Falling revenues will force the gulf countries to divert their attention towards
other sectors of their economies. Use of energy politics to uphold autocracy
will have to find a substitute, failing which, these countries might have to face
social unrest in the near future. Complete energy sufficiency of the US might
imply its disengagement from the Middle East politics. The paper concludes
that the revolution is still in its infancy and many effects are yet to be seen.
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1.
Name: Ansh Gupta
Contact No: 9650602393
College: Netaji Subhas Institute of Technology
Department: Electronics and Communication
2.
Name: Apoorva Bhushan
Contact No: 9718284135
College: Netaji Subhas Institute of Technology
Department: Electronics and Communication