Almost everywhere, the petroleum industry is dominated by nationally owned or big international companies with large inventories of fossil fuel resources. Logic dictates they develop their lowest-cost projects first.

Outside of the United States, tight oil is almost never the cheapest option, because the drilling and fracturing of horizontal wells require expensive equipment. Inside the United States, tight oil projects are compatible with a nearly unique landscape of independent producers who can operate on small margins but who lack the resources to undertake projects offshore or in remote locations.

This significant new resource does not make the United States a swing producer, an entity that controls spare capacity that can move markets quickly. The American oil industry today operates without spare capacity — large amounts of oil held in reserve that can be put on the market quickly and for a relatively sustained period. Nor is there centralized control over its nearly 9,000 independent producers.

Saudi Arabia is a swing producer. It has both spare capacity and centralized control of oil output. Until recently, it has quickly adjusted its crude oil production by as much as 1.5 million barrels per day to stabilize the price of oil.

However, a swing producer is not the same as a dominant producer, which has market power over the medium to long term. Dominant producers can raise prices by withholding supplies, or can capture market share by releasing supplies. OPEC was a dominant producer in the 1970s and early 1980s. There are no dominant producers today; no nation or group of nations can impose its will on oil markets.

Any attempt by oil producers to support high prices by cutting production is likely to be met by a surge of American oil. The United States oil industry has the ability to increase its rate of production by more than one million barrels of oil a day every year and has done so regularly since 2011.

Furthermore, the countries of the Middle East can no longer afford to increase their share of the market by flooding it with cheap oil. Large amounts of oil can be produced in the countries surrounding the Persian Gulf for as little as $10 per barrel, much lower than the $40 to $50 cost of tight oil in the United States. But the profit requirements are much different in the two regions.