The surge in unconventional oil production in the US in combination with higher than expected output in several OPEC nations hampered by domestic instability, and a slowing down of oil demand in China have led to a reduction in the price of oil by about 30% compared to June 2014. This depreciation is causing fiscal strain in many oil exporting countries. Members of the Organization of Petroleum Exporting Countries (OPEC) met in Vienna on November 27. The cartel faces one of the most important meetings in its existence. Can it cut production so that prices stabilize around the desired level?
In an article written for the NATO Energy Security Centre of Excellence, HCSS analysts Willem Auping and Sijbren de Jong zoom in on the impact of the US shale revolution on oil exporting countries in the Persian Gulf. The authors state that the current period of lower oil prices is not a temporary or unusual phenomenon, and that from a security point of view, NATO should be concerned about a sustained period of low oil prices. The full article can be downloaded using the button on the right.
