216
in Hangzhou, China and agreed to cooperate in oil markets by restricting supply,
eliminating saturation, and boosting prices (www.isna.ir 2020).
In low oil price period, US shale companies confront with the uneconomic production challenge which makes them to reduce production as the outstanding debt
cannot be accumulated for a long while; on the other hand, the market can be supplied from other oil producer countries. The other problem is because of the lack of
investment in the upstream and exploration of shale oil. Shale oil needs numerous
wells to be drilled every year to maintain the production rate which adds to the cost
of production. With lower oil prices, investors will not be convinced to participate
in E&P companies which eventually impacts the production rate of the US crude
oil. Concisely, the challenges of US energy export are as below:
• The market competition with the low-cost producers namely Russia and Saudi
Arabia
• The global warming raising concerns has forced the oil majors to revise their
future to invest more on the cleaner source of energy such as natural gas
• The enormous outstanding debts which there is no hope to be paid unless US
government bail them out
• The quality of shale oil does not meet the requirements of the fuel market in US
hence US has to import heavier crude oil to blend with the light shale oil.
(Author’s interview with Mo Dialami) (Fig. 6.4)
Fig. 6.4 Monthly crude oil and natural gas production. (Source: US Energy Information
Administration, Monthly Crude Oil and Natural Gas Production)
6 Trump Energy Diplomacy
in Hangzhou, China and agreed to cooperate in oil markets by restricting supply,
eliminating saturation, and boosting prices (www.isna.ir 2020).
In low oil price period, US shale companies confront with the uneconomic production challenge which makes them to reduce production as the outstanding debt
cannot be accumulated for a long while; on the other hand, the market can be supplied from other oil producer countries. The other problem is because of the lack of
investment in the upstream and exploration of shale oil. Shale oil needs numerous
wells to be drilled every year to maintain the production rate which adds to the cost
of production. With lower oil prices, investors will not be convinced to participate
in E&P companies which eventually impacts the production rate of the US crude
oil. Concisely, the challenges of US energy export are as below:
• The market competition with the low-cost producers namely Russia and Saudi
Arabia
• The global warming raising concerns has forced the oil majors to revise their
future to invest more on the cleaner source of energy such as natural gas
• The enormous outstanding debts which there is no hope to be paid unless US
government bail them out
• The quality of shale oil does not meet the requirements of the fuel market in US
hence US has to import heavier crude oil to blend with the light shale oil.
(Author’s interview with Mo Dialami) (Fig. 6.4)
Fig. 6.4 Monthly crude oil and natural gas production. (Source: US Energy Information
Administration, Monthly Crude Oil and Natural Gas Production)
6 Trump Energy Diplomacy