US shale oil drillers turned from scrappy wildcatters into multi-millionaires over the past two decades, propelling the United States to become the world’s largest producer, but now they are running out of runway.
Oil output gains are slowing and executives from some of the largest firms are warning of future declines from overworked oilfields and less productive wells.
On Sunday, the Organisation of the Petroleum Exporting Countries (OPEC) meets to decide whether to hold the line or cut its output, no longer afraid that their policy decisions might provoke a surge in shale production in the way they did in the years before the pandemic.
The sidelining of US shale means consumers around the world may face a winter of higher fuel prices.
Russia has threatened to block oil sales to countries supporting a European Union price cap, and the United States is winding down releases from emergency oil stockpiles that helped cool energy inflation. US shale production costs are soaring and there is no sign that tight-fisted investors will change their demand for returns rather than investment in expanding drilling.
Published in The Express Tribune, December 4th, 2022.
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