Low oil price favours Iran in Saudi Arabia dispute

Saudi Arabia has often counted on having the oil market’s equivalent of a nuclear option.

When the kingdom grew tired of Opec members exceeding their quotas in 1986, it opened the spigots and crashed prices to below $10 a barrel, counting on accumulated profits and low production costs to shore the country up against the flood of excess crude.

When Saudi wanted to snuff out US shale oil producers last year, it boosted daily output from 9.5m barrels in December 2014 to 10.6m barrels by July.