Mineral Economics

, Volume 31, Issue 1–2, pp 253–261 | Cite as

The Saudi 2014 gambit: a counterfactual analysis

  • James M. Griffin
Original Paper


The November 2014 Saudi gambit to increase oil production and drive down prices was a deliberate decision to quell the shale oil revolution. Ostensibly, that decision has been very costly to the Saudis, but the relevant question is would they find themselves worse off had they not acted. This paper presents a counterfactual analysis of that decision and finds that to have continued to cut production to sustain high prices would have been worse yet. Consequently, because of the shale revolution, future oil prices appear likely to fluctuate between a new floor and new ceiling price. A critical question then becomes what role will OPEC play in affecting prices within this new range of variation. This paper presents two contrasting views.


Oil prices OPEC Shale oil Saudi 2014 gambit 



The author wishes to thank Michael Pollard and F. Gregory Gause as well as an anonymous referee for helpful suggestions. Shelby Ponzik and Cynthia Gause provided excellent editorial assistance.


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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2017

Authors and Affiliations

  1. 1.Bush School of Government and Public ServiceTexas A&M UniversityCollege StationUSA

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