If Saudi Arabia intentionally crashed the price of oil in order to strangle the infant U.S. fracking industry, it didn’t work. In the world of Nietzsche: that which does not kill us makes us stronger. It spurred innovation and culled marginal players from the industry rather than killing the industry.

It isn’t entirely clear that the U.S. fracking industry was the prime target, Russia, Saudi Arabia’s adversary in Syria, and Iran, Saudi Arabia’s adversary in control of the Persian Gulf, may have also been targets as well.

As detailed in this article by Ambrose Evans-Pritchard, what Saudi Arabia did succeed in doing is destabilizing undercapitalized petro states around the globe like Nigeria and Venezuela. The destruction of offshore production projects may have an effect in the future since they require years to come on line, and supplies may be tight a decade from now, but for now petro states need to beware the fracklog. To quote AE-P:

Worse yet for Opec, consultants Rystad Energy say that 90pc of the 3,900 drilled but uncompleted wells – so-called ‘DUCs’ – are profitable at $50. This implies an overhang of easy supply waiting to hit the market.

If it is true that the majority of the world’s petro states need an oil price above $100/barrel, then political instability is only going to get worse. Imagine the Saudi regime failing or Iran’s perpetual revolution slipping into civil war.