As oil prices plummet, media reports give the impression that Saudi Arabia is comfortable with the situation. The International Monetary Fund (IMF) report released in October urged Gulf states, led by Saudi Arabia, to reform their economies, cut their spending and government support, create jobs in the private sector and address their domestic energy consumption. knowing that Saudi Arabia had stopped the exportation of 1 million barrels of oil during the past five years.

However, the IMF is simply ignoring the elephant in the room, exemplified by the Saudi social contract. Oil accounts for approximately 90% of the state's income, supporting the entire Saudi economy. In Saudi Arabia, the rentier state is the guarantor of political stability. Government projects constitute the backbone of the economy and ensure the income of the wealthy classes as well as well-paid jobs for low- and middle-income classes. On the other hand, the state is the ultimate arbiter of the distribution of wealth.

Low oil prices will have an impact on the Saudi economy, and the Saudis do not seem to have a way to adapt to the current situation. This is not the first time Saudi Arabia has faced low oil prices, and based on previous experiences in 1986, three policies will likely be adopted. The government will likely have to use its reserves, cut government projects and reduce public employment.

In March 1986, Saudi Arabia experienced the first oil-surplus crisis in its history as a modern state. The price of a barrel of oil reached $10, having deteriorated from $32 in November 1985. After reaching a historic high of $147 July 11, 2008, prices dropped again in January 2009 to $40. In both cases, oil lost more than 60% of its value in less than six months.