SWP Research Paper Stiftung Wissenschaft und Politik German Institute for International and Security Affairs Kirsten Westphal, Marco Overhaus and Guido Steinberg The US Shale Revolution and the Arab Gulf States The Economic and Political Impact of Changing Energy Markets RP 11 November 2014 Berlin All rights reserved. © Stiftung Wissenschaft und Politik, 2014 SWP Research Papers are peer reviewed by senior researchers and the execu- tive board of the Institute. They express exclusively the personal views of the author(s). SWP Stiftung Wissenschaft und Politik German Institute for International and Security Affairs Ludwigkirchplatz 34 10719 Berlin Germany Phone +49 30 880 07-0 Fax +49 30 880 07-100 www.swp-berlin.org
[email protected] ISSN 1863-1053 Translation by Meredith Dale (English version of SWP-Studie 15/2014) Table of Contents 5 Problems and Conclusions 7 The US Shale Revolution and the Dynamics of the Global Energy Markets 7 The US Shale Revolution and Its Geo-economic Consequences 12 The New Energy Map 13 US-Exports: Strategic Considerations and Commercial Rationale 14 US Strategic Interests 14 US Engagement in the Persian Gulf 16 The Debate in the United States 18 The Economic Impact of the Shale Revolution on the Gulf States 18 The Position of the Gulf States in the Inter- national Energy Markets 19 The Gulf States and the Changing International Energy Markets 23 Socio-economic Developments in the Gulf 24 Growing Domestic Demand, Home-grown Crises and Political Quandaries 25 Gas Crisis amidst Rich Reserves 27 Political Consequences for Gulf States 27 The Economic Elites and the Shale Revolution 28 Risks to Internal Security 29 Foreign Policy Consequences 31 Conclusions and Recommendations 33 Abbreviations 33 Further Reading Dr.