A few years ago, low oil prices would have induced Saudi Arabia to shut off a few valves in Abqaiq. Today, it is U.S. producers that are reducing investment. The effect is the same. Prices of West Texas Intermediate crude, the U.S. benchmark, climbed 14 percent during April. What is exceptional in this story is that shale producers were willing — and able — to reduce their activity so quickly, so collectively, and without the intervention of cartel bosses or a regulatory agency. The world’s oversupplied oil markets are getting respite because thousands of competitive firms, all of them small players compared to the national oil giants in OPEC, are reacting to market signals.
Read "The U.S. Shale Boom Takes a Break," published by Foreign Affairs on May 26, 2015.