I look at it this way... the rational Saudi strategy is to maximize their net revenue - over the life of their resources, discounted by the time-value of that revenue.
So higher prices now = best
Higher production now = best
Rapid production at moderate prices = good enough .... (depletes quickly, but get money sooner)
Slow production at high prices = poor to fair ....... (far future income gets a bigger time-value discount)
Leaving resources in the ground because no demand = terrible
Unfortunately (for the Saudis), the market became oversupplied due to slightly lower demand growth in the fast-growing markets (China, India SE Asia), recession in Japan and Europe, and higher efficiency vehicles mandated in US by Obama (thanks, Obama!)
Oversupplied for a second reason - US oil-shale frakking.
Nothing new there, we all know about those things. What can the Saudis do about it? One of two things must happen, they really have no choice - the oversupplied market, inelastic supply, inelastic demand they either:
1. Reduce output, keep prices up
2. Keep output up, accept lower price
Both are worse than status quo several months ago, but they can try to predict which will be better in the long run for their future output x price = revenue projections.
So I think they see the long run danger to be aggressive adoption of EV and hybrids that slash demand, combined with increasing US output. Imagine their nightmare scenario - US halves oil demand because of EVs and hybrids, while increasing output another 50%. That makes us a competitor instead of a customer!
Reducing output to maintain prices just hastens that nightmare's arrival, without any increase in short-term net revenue.
Lower prices/higher output still earns a decent net revenue for the Saudis (and only for the Saudis), while the frakkers wither and rust in the field, unable to repay their debts, unable to get financing for new drilling, and rapidly depleting their existing wells. EV adoption is delayed a few more years, weak economies get a small boost from lower energy costs, allowing at least some recovery of demand.
The new equilibrium may be at prices lower than $100/bbl - say it is $75 in the long run. Saudi's still make decent money, every other producer struggles, US frakkers may re-enter, but they will be much more conservative, maybe relying on cash-flow instead of debt/stock share financing.
The risk of another rapid oversupply situation is much lower, demand is boosted (although it may still continue falling, just not as fast), Saudis emerge as the only truly profitable supplier for decades to come. Their relative influence increases, even if their absolute net revenue declines slightly.
Is it possible the Saudis see it this way?