Start with the comfortable assumption that Saudi Arabia is the big dog in OPEC. So big in fact, that the tail cannot wag the dog. Outside of OPEC, the next tier of producers are the US, Russia and the North Sea countries of Great Britain and Norway. Going down one more tier you get Indonesia, Nigeria, Mexico, etc.
About the only thing I assume about SA is that they will act in their own interests. For the most part, I think their interests are to have a stable west, keep Iran screwed up and to minimize Russian influences.
So, how SA addresses their interests is manipulating the price of oil by opening and closing their spigot. The general goal is to maximize their profit margin while not killing the golden goose of western economies. Desperate or overly stressed countries can destabilize the status quo and do unpredictable things that are not good for SA’s business of selling oil.
Prez DJT removed SA’s economic sword over the US, which enabled the US to be the trustworthy broker that increased stability in ways SA viewed as a positive while increasing stress on crazy Iran and constraining Russia.
That's about as far as I can make sense of this stuff.
My opinions....
Thanks. That all seems to make sense, probably because it closely parallels my take / my best guesses. Heheh. Except...
(also rather simplified)
If the Saudis need $80+ / barrel oil (in 2020 dollars) to run their country & maintain the monarchy, unless US production very severely stumbles*, in the long run the difference has to be made up first from their currency reserves and then eventually through debt.
*With our current idiots in charge, a stumble of a lot more than energy production may well happen in the US, but I also expect much more trouble for Saudi from Iran and Russia, unimpeded by the US. So, I suspect the Saudis’ overall situation may be even worse in coming years despite higher energy prices. “More pain than gain”, so to speak.
In the long run, I really don’t know how much debt Saudi Arabia can sustain without a societal collapse, or, at least, a collapse of the monarchy. (Same thing?) That especially if Iran is resurgent. They certainly do not seem to have a flexible, adaptable economy. That leaves me wondering if the monarchy is just kicking the can down the road, hampering their enemies, and hoping the inevitable does not occur in their lifetimes. Possibly they hope the Asian economies will return to rapid and sustained growth, creating demand to drive prices and volume to levels that will sustain them. But, that’s just my guess.