Naturally, this isn't ideal for oil producers like Saudi Arabia.

But there is reason why Saudi Arabia might actually kind of like the "lower for longer" oil environment.

As Oppenheimer's James Schumm argues in a recent note to clients (emphasis ours):

We have long believed that the Saudis are driving oil prices lower to inflict pain on Iran. Any collateral damage to US shale producers is a secondary or tertiary benefit. Though low oil prices hurt Saudi Arabia, they negatively impact Iran in a much greater way and it crimps Iran's ability to fund sectarian uprisings in Saudi Arabia's backyard. Essentially, they are forcing Iran to choose between higher oil prices and the economic prosperity that comes with it, and the desire to foment Shia uprisings in the Middle East. In essence we believe Saudi Arabia and Iran are fighting a war without tanks and jets but one with oil prices.