The break even price is estimated at current pumping rate vs gross profit; but Saudi Arabia can relatively easily increase their pumping rate. The cash cost for the Saudis per barrel is sub $5. So they can up their production rate to handle the difference; they are incentivised to do so if they truly believe that their reserves will become a stranded asset.<p>In contrast after running and royalties cash costs in the US are up towards $30&#x2F;bbl and Canadian oil sands towards $40&#x2F;bbl. But, the size of wells using these technologies are smaller. And, those wells cost more to discover, and tap. This means US &#x2F; Canadian oil is more affected by marginal cost, both in terms of price flexibility and liquidity (both cash and oil).<p>And the biggest threat, in the medium term, to oil prices is some of the range of alternative energy sources. Solar costs are coming down quite rapidly. Wind is coming down but more slowly (a chunk of this is in real rather than nominal terms; depending on currency). And nuclear in time will probably come down if increasing investment leads to predicted efficiency gains.<p>Oil isn&#x27;t going to disappear overnight, but it does have a bordering on existential threat in the medium term. The only largely protected part of this market I can see here is large scale transportation, i.e. sea and air transport.