With the price of Brent Crude down to around $90 a barrel, the question on everyone’s mind is, “When will oil find a floor?” Well, almost everyone. Saudi Arabia doesn’t seem to be too concerned.

According to an exclusive report at Reuters, the Saudis have been spreading the word around the oil markets that they would not be uncomfortable if oil prices fell to as low as $80 for as long as a year or two. This stance represents a dramatic change from the kingdom’s current strategy of holding prices as near to $100 a barrel as they can.

Why the change? Market share is the first answer. The Saudis produce nearly 10 million barrels of crude a day and virtually all of it is sold on contract, which means that very little makes it to the spot market. Estimates vary on how much it costs the Saudis to pump the oil out of the ground, but most are around $25 to $35 a barrel. It’s easy to see how Saudi Arabia can still make a handsome profit at $80 a barrel.

The second part of the answer is that the Saudis actually do want a production cut, but that they are unwilling to bear the burden of the lost production without some cuts from other members of OPEC. Saudi Arabia can withstand low prices a lot longer than, for example, Venezuela can.

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The Saudis appear at last to have faced the reality of the swelling production in North America, particularly in the United States, and the impact of that production on the global oil market. Coupled with falling demand and increasing output from Russia, the Saudis recognized that whatever grasp they had on the market to begin with could gradually (or even suddenly) slip away.

In last Friday’s October Oil Market Report, OPEC affirmed its estimate of demand growth for 2014 at 1.05 million barrels a day. The cartel also said that non-OPEC supply will grow at a rate of 1.68 million barrels a day in 2014 and 1.24 million barrels a day in 2015. More troublesome is that demand for OPEC crude in 2014 is currently forecast at 29.5 million barrels a day, and the cartel was producing nearly 1 million barrels a day more than that. Demand for OPEC crude is forecast to fall to 29.2 million barrels a day next year.

According to AAA, the average cost of a gallon of gasoline in the United States Monday morning was $3.199, down from $3.289 a week ago, $3.403 a month ago and $3.344 a year ago. In six states, a gallon of regular gas costs less than $3, and in 11 others a gallon costs less than $3.10.

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