Global exploitation of shale oil and gas will redefine the

geo-politics of Middle –East and the World

By: Apoorva Bhushan and Ansh Gupta

Netaji Subhas Institute of technology
 What is shale gas?
Sedimentary Rocks
Formed due to compression of
mud and minerals
Extracted using fracking
technology
Stimulates flow through the
non- porous rocks by fracturing
those using pressurised liquids
 Genesis of Technology

Technology has been in the

industry since 19th century.
Was much more expensive until
very recently.
Technological advancements by US
Made the extraction commercially
and economically viable
 Scenario before the Shale Boom
Since the 1930s, the global energy market has been controlled
by Russia and the OPEC.

Dictated prices politically

Forced investors into contracts
Oil has been the cause for
numerous wars
 Consumption Pattern

US tops the list of

countries when it
comes to energy
demand

Consumes nearly three

times that of China
US and the shale boom
• US demand for oil suddenly reduced to a great
extent.
• Ban to export oil was lifted

• Dwindling demand was met with increasing

oversupply.

• Prices plunged and revenues fell to an all time

low for oil producing regions.
 Attempt to back fire
In November 2015, OPEC
announced it was unwilling to cut
down production.
Mainly Saudi Arabia involved.
Richest among all and could bear
the pain of dwindling prices.
Attempted to keep its global share
intact but failed.
US innovated and survived at even
$50 per barrel.
 The
Venezuela interdependent
economies
Qatar

Saudi
Arabia

Iran
 The Ride down
Saudi Arabia announced a fiscal
deficit of $100 billion, severe cuts in
bonus and increments
Venezuela: Revenue dropped by
60%, Two month emergency period
Qatar: utility rates hiked, Qatar
museums and Aljazeera told to cut
expenses
Iran sanctions lifted, will add to
oversupply
 USA
Major importer to near self
sufficiency, boost to
economy
Imports dropped
Excess natural gas to be
imported as LNG
Asia and Europe, target
markets
Creation of jobs
Russia
Wants to stabilize oil
market
Vast reserves and
Efficient transport
network no longer
working
Advantage of high
cost of export from US
 China
Shale boom not expected despite
huge reserves
Unfavourable geographical
conditions
Unsuitable topography for drilling
Accused of providing self-subsidies
Wants to replace European market
 European Union
Relies on Russia heavily for
resources
Bulgaria, France banned
fracking
Britain, Poland face protests
Risk to environment-water
contamination, earthquake
Supportive new PM of UK
 Conclusion
and
future implications
• Disengagement of US from matters
beyond its boundaries, particularly
Middle East
• Destabilising effect on the population of
gulf countries
• Need some real socio-economic reforms
• Underdog producers might just
make it to the top
• Gulf economies need to diversify
• Growing importance of the third world
countries