Faced with lack of demand and falling prices, any business has three options: carry on regardless; reduce, or suspend production; or lower costs. Saudi Arabia chose option one. This strategy relies on others either going out of business, or suspending operations to reduce supply. The Arabian producers can afford to pick that option because they have the lowest production costs among all oil producers. According to Morgan Stanley Commodity Research, some Middle-Eastern onshore production can break even at $10 per barrel. Others in that region need around $37 per barrel, with the average breakeven point for onshore wells in the Gulf states at around $27 per barrel. US shale oil doesn't start to pay back until it achieves a price of at least $50 per barrel. Current production costs vary between that breakeven point and a price of $80 per barrel.