Reducing Iran's Economic Vulnerability to the U.S. Shale Oil Entry into the Global Market

پژوهش نامه ایرانی سیاست بین الملل

Volume 11, Issue 2 - Serial Number 22, March 2023, Pages 505-548   

Document Type: Original Article

DOI: 10.22067/irlip.2022.72360.1147

Authors

Vida Varahrami^{* 1}; Mehdi Ferdowsian²

¹Shahid beheshti university

²Shahid beheshti

Abstract

In recent years, the accelerated production of SHELL Oil has led to US Oil Independency alongside with fundamental changes in the oil market (acceleration in Oil supply and Constant decline of prices). But this oil independence has also led to fundamental changes in the US political and security perspective toward of oil-rich countries. Exerting maximum pressure for removing Iranian and Venezuelan oil from world markets is a clear indication of this change in US policy. The adherence of other countries (oil producers and consumers) with the United States also indicates the stability of US hegemony in the international arena. Therefore, by stating the conditions of the crude oil market, we provide an overview of the current situation of the crude oil market which indicates the existence of surplus oil for a long period time which reduces the probability of supply shocks in the oil market. On the other hand, by expressing the American hegemony from various aspects, we conclude that by using its power, the United States can impose its policies on the oil market without fearing the oil supply disruptions, and seize part of the market of oil rich countries. In the following, we introduce an index (which indicates the degree of political and economic alignment of oil-producing countries with the United States policies) in order to examine the US economic and political relations with oil-producing countries, and based on this index we introduce Russia as the next potential target for the United States at the oil market. Finally, by designing a dynamic game with complete information, we examine the choices of Iran and the United States for removing Iran from the oil market and then we evaluate the current strategy of Iran and the United States (which has led to elimination of Iran from the oil market) and the consequences of each action (US) and reactions (Iran) during this Oil game (war) in short-term, medium-term and long-term periods.

Keywords

Global Crude Oil Market; Sell Oil; Iran; US Game Theory

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