Low oil prices will not have a negative impact on the US shale industry, but rather will help it consolidate, according to speakers at the US Exim conference.

While many in the oil sector expect the price drop to prompt a production decline for US shale – which would in turn lead to a supply cut and push prices back up – experts speaking at the Washington event said the industry would be surprised by its resilience.

“We’re not as optimistic as OPEC. We think US shale production is not declining, and the world is about to be surprised by how robust that technology is. We’re going to see consolidation in the system,” said Skip York, vice-president, integrated energy at Wood Mackenzie.

Consolidation has already been observed by Jacqueline Hinman, chairman and CEO of engineering consultancy CH2M Hill. “The impact of falling oil prices depends on your timeframe. They are as good for America as they are for everyone else. We are seeing incredible efficiencies which will lead to a much more competitive, efficient, better-run oil and gas industry coming out of it. We will see the difference in terms of value operation,” she explained.

US shale oil will not be able to respond fast enough for the spike in demand towards the end of the decade. Skip York, Wood Mackenzie

And while in the short term, large oil and gas projects around the world might be put on hold, these will be needed again in a matter of a few years, or crude runs the risk of undergoing a significant price spike when demand rises again at the end of the decade.

“The oil market is always anticipating and forward-looking and in a few years you’re going need those large mega projects that were part of the reason why we’re in oversupply now. Eventually the price has to start going back to the point where those projects can be justified, because the other quick response like US shale oil will not be able to respond fast enough for the spike in demand towards the end of the decade,” added York, who expects the price to head back towards US$90 per barrel around 2018-20.