Despite the escalating tensions between Iran and Israel, oil prices remained stable at $87 per barrel, supported by American “shale oil,” which provided partial protection for global markets.

This relative calm is due to major factors, most notably the increase in American production. The United States’ production of shale oil reached 20 million barrels per day. To become approximately equal to internal consumption; Which reduced its dependence on foreign imports.

The United States also turned into a net exporter of oil in 2019, becoming less affected by production fluctuations in other countries. In addition to the decline in the impact of OPEC’s cuts, shale oil helped reduce the impact of OPEC’s production cuts. This contributed to price stability, and finally the increased production allowed the United States to impose sanctions on suppliers such as Venezuela and Russia without fear of oil prices rising significantly.

However, “shale oil” does not provide complete protection for global markets; The United States remains vulnerable to oil shocks, such as an all-out war in the region or the closure of the Strait of Hormuz. Moreover, the United States relies on large vehicles that consume large amounts of fuel; Which makes it vulnerable to oil price fluctuations, just as “shale oil” itself is vulnerable to price fluctuations. This makes it a completely unreliable component of the global oil market.