When the Saudis, the leaders of Opec, decided at the cartel’s recent meeting in Vienna to maintain their oil production levels, it sent a strong message to the world: the market, not Opec, should decide oil prices. As a result oil prices dropped, falling below $60 per barrel this week.

This is a big change for the world’s largest oil exporter, which has in the past attempted to manage the global oil markets by altering production levels. The kingdom in essence decided to pursue a policy that not only preserves its market share in the long term but also heralds the coming end of Opec as a united organisation that still has a collective say in export decisions. While the decision was unpopular with most oil-exporting countries and large international energy companies, there are several reasons for Saudi Arabia to take this approach.

First, the Saudi leadership has long recognised the strategic importance of spare production capacity, so it has spent at least $10bn in the past decade to maintain 2m barrels per day of capacity that can be called upon at short notice. No other country has had the political will and foresight to do this, and it provides the Saudis with the means to go it alone against the will of the majority of oil producers, led by Russia, Iran and Venezuela.