Effects of U.S. export ban removal on U.S. shale oil production across different basins

Petroleum, one of the indispensable crude materials of the globalizing world, appears in various fields from transportation to industry. The uneven distribution of oil resources in the world prompt countries with high oil consumption to turn their head towards technological innovations. The technology that provides the combination of hydraulic fracturing and horizontal drilling is the facilitator of the extraction and production of shale oil rock. Shale oil rock, found in many parts of the world but is difficult to extract to the earth, is changing U.S.'s standing in the global oil market. The aim of this thesis is to examine the sensitivity of shale oil production towards both domestic and foreign oil demands in 8 different basins of the U.S. In order to demonstrate this relationship, the Factor Augmented Vector Autoregressive model is used with 42 macro and financial variables for the 2014-2019 period. As a result of the impulse response analysis, it is determined that Western/Eagle Ford is the most sensitive basin against the shock given to domestic oil exports from the U.S. Gulf Coast, while the Permian basin is the most sensitive region against the shock given to foreign oil exports.