Huge increase in oil production in the U.S. created by horizontal drilling and hydraulic fracturing is a strategic threat to OPEC.
Against Crony Capitalism blog observes:
Saudi Arabia is concerned. Thanks to the shale gas revolution which has blossomed in the United States and which is starting to blossom in places like the United Kingdom and even China, the Saudi stranglehold on world energy reserves is loosening with each passing day.
The linked article at Sky News, Saudi Prince: Fracking Is Threat To Kingdom, reports a billionaire Saudi prince has publicly warned his government there is a long-term threat to their economic production. He also called on his government to diversify the Saudi economy.
In his open letter on Twitter, the prince said demand for Saudi oil is
“in continuous decline”
In terms of concentration on oil in the economy, the Sky News article quotes the prince as saying:
“Our country is facing a threat with the continuation of its near-complete reliance on oil, especially as 92% of the budget for this year depends on oil.
With that level of concentration, the possibility of a long-term decline in sales due to more oil availability in the U.S. is a huge strategic risk.
Fracking is changing geopolitical equations.