Oil price shocks on shale oil supply and energy security: a case study of the United States
International Journal of Development Issues
ISSN: 1446-8956
Article publication date: 29 March 2022
Issue publication date: 7 June 2022
Abstract
Purpose
The purpose of this study is to examine oil price shocks on US shale oil supply and energy security during the period 2000q1–2020q4.
Design/methodology/approach
In this study, the Shannon–Wiener index was used to calculate energy security, and then a structural vector autoregression (VAR) was applied to measure the effect of oil price shocks.
Findings
The results of the variance decomposition indicate that oil prices account for about 20% of changes in US shale oil production, while it explains only about 3% of changes in energy security. Finally, historical decomposition confirms the results of impulse response functions.
Originality/value
The novelty of this study is that so far, no study has examined the effect of oil price shock on shale oil production and energy security in the USA using the structural VAR model. This study also used the latest Shannon–Wiener index as a measure of energy security in the USA. The reason for selecting this index is that, in addition to considering the share of the total consumption of each primary energy, the share of energy imports from each country as well as the political risk of energy exporting countries to the USA are also included.
Keywords
Acknowledgements
Funding: This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.
Availability of data and materials: The data sets used and/or analyzed during the current study are available from the corresponding author on reasonable request.
Citation
Kazemzadeh, E., Ahmadi Shadmehri, M.T., Ebrahimi Salari, T., Salehnia, N. and Pooya, A. (2022), "Oil price shocks on shale oil supply and energy security: a case study of the United States", International Journal of Development Issues, Vol. 21 No. 2, pp. 249-270. https://doi.org/10.1108/IJDI-12-2021-0264
Publisher
:Emerald Publishing Limited
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