The biggest losers from the current price war between OPEC and the shale producers seem set to be producers outside the Middle East and North America caught in the cross-fire.
Expensive production from the North Sea, Canada's oil sands, offshore megaprojects, weaker African and Latin American members of OPEC, and frontier exploration areas around the world are all being squeezed hard by the price slump.
According to oilfield services company Baker Hughes, the number of rigs drilling for oil outside North America has fallen by over 200, or about 19%, since July 2014 (http://link.reuters.com/ser35w).
Rig counts have fallen in every region, with 28 fewer active rigs in Europe, 47 fewer in the Middle East, 33 in Africa, 66 in Latin America and 34 in Asia Pacific.
Proportionately, the hardest hit regions have been Europe and Africa, where more than 30 percent of rigs operating in the middle of last year have since been idled.
But the slowdown is broad-based, with big downturns in countries as far apart as Mexico, India, Turkey, Brazil, Iraq, Colombia and Ecuador.
Major drilling contractors including Transocean, Schlumberger and Baker Hughes have all reported a sharp drop in international business.
Schlumberger told investors in July it expects exploration and production spending outside North America to fall by 15% in 2015.
The company's second-quarter revenues fell 5% compared with the first three months of the year as a result of customer budget cuts and the need to reduce contract prices to retain business.
With major international oil companies including Chevron and Shell announcing further cuts in their capital budgets, the downturn will persist throughout the rest of 2015 and likely well into 2016.
"Looking ahead to the second half of 2015, we expect ... unfavorable market dynamics to persist," Baker Hughes warned its shareholders last month.
"In North America, we don't anticipate activity to increase while commodity prices remain depressed ... Internationally, rig counts are projected to continue to decline led by many onshore and shallow water markets," the company admitted.
Slumping oil prices and a fight for market share are often portrayed as a straight fight between OPEC (especially Saudi Arabia and its close allies in the Gulf) and the North American shale drillers.
But the biggest losers, who will bear much of the adjustment to a new market balance, are likely to come from the rest of the world.
Shale has been disruptive precisely because it has emerged in the middle of the cost curve, more expensive than giant fields in the Gulf, but cheaper than megaprojects, and directly competing with the North Sea and Canada.
Production from the mature shale plays of North Dakota and Texas is also more predictable and lower risk than some frontier exploration areas and aging provinces like the North Sea.
Market rebalancing is therefore likely to leave both the Middle East Gulf producers and North American shale drillers with unchanged or even enhanced market shares.
Production slowdowns will have to come elsewhere, where risk-adjusted returns are poorer and investment requirements are higher.
The process appears to be well underway. The International Energy Agency predicts non-OPEC oil supply will be flat in 2016, after growing 2.4 million bpd in 2014 and 1.0 million bpd in 2015.
Most of the initial slowdown will come from a plateauing of shale production after huge gains of more than 1 million bpd in both 2013 and 2014.
But in the medium term, non-OPEC non-shale output looks set to be squeezed hard by the investment downturn.
With international marker Brent back down to just $50 per barrel, from over $100 at this point last year, many non-shale, non-Gulf projects are under even greater threat than before.
Saudi Arabia appears to be calculating low prices will encourage enough demand growth while restraining non-OPEC non-shale production, enabling the market to absorb resumed Iranian exports in 2016 without having to cut Saudi Arabia's own production.
That's a high-risk strategy, but the downturn in international drilling and sharp cuts in exploration and production budgets suggest it might just pay off.© (c) Copyright Thomson Reuters 2015.