Saudis battle for oil market supremacy

By abandoning the tight rein it held for decades on the oil market, OPEC heavyweight Saudi Arabia launched a battle for control that sent crude prices plummeting.

It has been a painful fight, experts say, but with its vast resources the Gulf kingdom is showing no signs of giving up.

The huge drop in oil prices since mid-2014, from more than $110 a barrel to around $30, followed a decision by the Saudi-influenced Organization of the Petroleum Exporting Countries not to cut output as it had in the past to keep prices high.

The move came as traditional suppliers like Saudi Arabia were facing increasing pressure from new market players, in particular US shale producers, and aimed to squeeze them out.

It also sought to put pressure on non-OPEC member Russia -- the biggest global oil producer -- and to force a trimming of output by fellow OPEC member Iran, Riyadh's regional political rival.

As the freefall in prices has continued, calls have grown on Riyadh and its Gulf Arab neighbours to reconsider.

With the market awash in crude, even the chairman of state-owned oil giant Saudi Aramco has said prices have reached "irrational" levels.

But still Riyadh has given no indication of wavering.

"The Saudis are well aware that if they cut production, it will not greatly impact prices because their cut will be replaced by other producers like Iran, Iraq, Russia," said oil expert Jean-Francois Seznec at Georgetown University