U.S. drivers have enjoyed a noticeable drop in gas prices during December. They may want to send a belated holiday card to Saudi Arabia, which is responsible for flooding the oil market with crude in an attempt to harm certain foreign governments and perhaps even North American shale oil producers.

Saudi officials seem bent on reestablishing their dominance in the world when it comes to oil, according to industry sources. In doing so, the oil kingdom could end up hurting Russia, Iran and those here who produce shale oil by hydraulic fracturing technology, or fracking.

Media reports say Saudi leadership is unhappy with Russia’s support for the Assad regime in Syria, making them a prime target for its oil-flooding strategy. The Sunni-led Saudis have also long been at odds with Shiite-dominated Iran, which relies significantly on oil exports for revenue. And if the oil glut cripples the North American fracking shale boom, well, Saudi Arabia won’t necessarily shed any tears over that development, either.

Saudi oil minister Ali al-Naimi made it clear in public remarks that the kingdom will go to the mat to reaffirm its dominance—even if it means lowering the price of crude to $20 a barrel. That would be a remarkable change in oil pricing, considering it has steadily held at $90 to $100 or more a barrel for years.

 “It is not in the interest of OPEC producers to cut their production, whatever the price is,” al-Naimi told the Middle East Economic Survey. “Whether it goes down to $20, $40, $50, $60, it is irrelevant.”

He added: “We want to tell the world that high efficiency producing countries are the ones that deserve market share. … If the price falls, it falls . . . Others will be harmed greatly before we feel any pain.”

The downward pressure on oil prices has already stopped a proposed liquefied natural gas plant in Texas aimed at exporting American gas to Asia.

-Noel Brinkerhoff

To Learn More:

Saudis Tell Shale Industry It Will Break Them, Plans to Keep Pumping Even at $20 a Barrel (by Yves Smith, Naked Capitalism)

Did The Saudis and the U.S. Collude In Dropping Oil Prices? (by Andrew Topf, Oilprice.com)

Exclusive: Oil Price Crash Claims First U.S. LNG Project Casualty (by Oleg Vukmanovic, Reuters)