Shale revolution and OPEC

OPEC’s response to American shale oil was to create a supply glut, which would bring down the price of oil.

As far as the logic went, if oil price was too low, it would drive the high-cost shale oil producers out of business.

OPEC is facing some of the most severe threats in its 56-year history. The inability of OPEC to agree to production cuts triggered a battle for market share, both inside and outside the cartel.

References:

• Thijs Van de Graaf, “The future of OPEC: it won’t die, but it will become a different animal,” Energy Post, November 28, 2016.