Originally Posted by
Scoop
Makes sense. This has been going on since OPEC first came together. The Saudis have hundreds of years of "known oil reserves" in the ground and have always been much more conservative than many other OPEC members.
The Saudis know that sustained higher prices will accelerate research and development into oil substitutes, and with the largest know reserves, have the most to lose if viable oil substitutes should hit the market.
Ideally the Saudis would like to keep oil at a "sweet spot" that will continue to provide them with billions for years to come, but at the same time low enough to keep alternatives economically non-viable.
Scoop
It's not just substitutes, Saudi's realize that $100+ oil was fueling fracking development not just in the US but in other parts of the world. They realize that $75 barrel of oil will do more to put a damper on fracking and energy development than any regulation can. You are already hearing talk of some major #&^(# hurt in the midwest and plains states that were set up for oil at considerably higher levels.
Funny though, you never quite feel the sympathy for a struggling oil industry throughout the press as you do when oil is going up....