When this last happened at the height of the cold war in 1985, it followed a visit by then Vice President George H. W. Bush to Saudi Arabia. Bush convinced the Saudi royal family it was in their best interest to reduce the price of crude oil to regain market share. As a beneficial side effect, Russia lost a major source of foreign exchange. This followed a major investment by Russia in radar capability, which was largely negated by the publicity of the US then recently developed stealth technology. With reduced foreign exchange, Russia was unable to replicate the stealth technology and the Soviet Union failed. Unfortunately, the economies of the oil producing states, Texas among the most extreme example, were crippled.
This time around, Obama visited Saudi Arabia twice during 2014, Bidden called the Saudi royal family once and the UAE twice. This time it appears the primary objective is to cripple the oil producing states economies, principally Texas, which have been a thorn in Obama’s side. The beneficial side effects of reducing Russia’s foreign exchange, increasing Saudi market share, and reducing the foreign exchange of Iran, along with the positive effect on the economies of states more aligned with Obama, are perhaps just that, side effects.
By the way, crude prices dropped from a intra day high of about $32 in 1985 to a intra day low of $8 in 1986. That is a 75% drop. Prices did not return to $32 on a sustained basis until 2003. Based on that history, we may see oil prices as low as $25 and they may last for several years.
The good news, Texas recovered last time, and will this time as well.
It is also destroying Venezuela and Iran, so I do not think Obama wanted this. He wanted high gas prices. His renewable energy sector will be annihilated. Think the theory posted by another Freeper is a better fit. The Saud’s are in a big bind. Iran, the Russians and the Shiites are closing the noose. Look at what just happened in Yemen. The Saud’s knew that was coming. World War III began at Benghazi and is picking up steam.
And Texas has diversified, luring in all kinds of businesses with low tax and business friendly environment.
Times are different for OPEC than it was then.