Russia’s Battle with US Shale Revolution

Russia has been determined to stop the US shale oil growth since 2014. But this is not the objective of OPEC in general. Neither Saudi Arabia nor OPEC wants to end the US shale growth. What they want is for all producers to share the growth in demand.

Saudi Arabia and the rest of OPEC benefited from the existence of shale.  Just imagine a world with no shale oil production: that would be a chaotic world without the 9 mb/d that came from shale starting in 2010.  Saud Arabia experienced mounting political pressures in 2007 and 2009 to increase production and capacity as world oil supplies dwindled.

Saud Arabia, specifically, benefited financially from shale. When the US started exporting oil, and after the Obama administration lifted an export ban on US-produced oil towards the end of 2015, VLCCs owned by Saudi Arabia’s National Shipping Company, Bahri, were loaded with US light sweet crude for China, India, and other oil consumers.

While some giant producers like Saudi Arabia have gained from the US shale revolution, Russia has been determined for years now to end the shale growth.

Understanding Russia’s Stance on US Shale