OIL PRICE WAR AND THE COST OF IT TO SAUDI ARABIA

This is a very interesting article. OPEC declaration of war on US shale oil companies comes with a hefty price, almost US$140B for Saudi Arabia.

Saudi Arabia simply cannot sustain at current oil price as the country could burn a big and deep hole in its foreign reserves. Whether it is a miscalculation or a misjudgement on the resolve of the US shale oil companies, it has one option available to it. To hasten the the collapse of oil price to put and quick end to the shale oil revolution, but at a startling cost to its economy.

This could be the reason why despite the low oil price, OPEC countries are increasing production while several of OPEC's sovereign funds were reported to be shorting oil.

http://www.albawaba.com/business/saudi-going-broke-as-it-burns-through-foreign-reserves-731602