This is a Free article. You will receive access to the full text.

The Impact of U.S. Supply Shocks on the Global Oil Price

Free Article

Abstract:
I examine the role of the U.S. shale oil boom in driving global oil prices. Using a structural vector autoregressive (SVAR) model that identifies separate oil supply shocks for the U.S. and OPEC, I find that U.S. supply shocks can account for up to 13% of the oil price variation over the 2003-2015 period. This is considerably more than what has been found in other studies. Moreover, while U.S. oil production has increased substantially since 2010, U.S. oil supply shocks first started to contribute negatively to oil prices beginning in late 2013. This mismatch implies a temporary friction in the transmission of U.S. supply shocks to the rest of the world likely caused by logistical and technological challenges observed in the downstream supply chain.

Download PDF

Keywords: Structural VARs, Oil prices, Demand and supply shocks, Shale oil

DOI: 10.5547/01956574.41.1.tgun

References: Reference information is available for this article. Join IAEE, log in, or purchase the article to view reference data.

Published in Volume 41, Number 1 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.

 

© 2024 International Association for Energy Economics | Privacy Policy | Return Policy