The Shale Revolution and the Dynamics of the Oil Market

Bibliographic Data

ID9710957
AuthorsNathan S Balke (0000-0001-8597-4258, Southern Methodist University, corresponding author), Xin Jin (0000-0003-4590-5834, University of Aberdeen), Mine Yücel (Federal Reserve Bank of Dallas), Mine K Yücel (Federal Reserve Bank of Dallas)
Year2024
Volume134
Issue662
Pages2252-2289
Publication date2024-08-22
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (PUBLISHER • GB)
DOI10.1093/ej/ueae013
OpenAlexW3121962694
LanguageEN
Citations received1
References cited40

We build and estimate a dynamic, structural model of the world oil market to quantify the impact of the shale revolution. We model the shale revolution as a decrease in shale production costs and find that the resultant increase in shale production lowers oil prices by 24% in the short run and 48% once the shale oil transition is complete. Current oil price volatility is lowered by 8% to 23% depending on the horizon. We also find that OPEC core acts to keep its market share constant in the face of the dramatic increase in shale production

Econometrics · Economics · Microeconomics · Natural resource economics · Oil shale · Petroleum engineering · Production (economics · Shale oil · Shale oil extraction · Tight oil · Volatility (finance · Geology · Global Energy and Sustainability Research · Market Dynamics and Volatility · Natural Resources and Economic Development · Paleontology

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