When global oil prices tumbled from $145 per barrel in July 2008 to an average price of $100 for West Texas Intermediate in the 2014 aftermath of the great financial recession, it was assumed global Brent crude at roughly 10% higher and “Texas light” would stabilize at these prices.
What neither Saudi Arabia nor Russia, the world’s 10 million-barrel-per-day producers considered was the outburst of U.S. hydraulic fracturing (fracking) that made these prices less cost-effective within a short time period (2011-14). U.S. crude oil production had skyrocketed from 3.4 million daily barrels to more than 10 million by mid-2014.