An ongoing price slump is rattling the industry and weakening petrostates. How will low prices change the world? Here's everything you need to know:

How cheap is oil?

Prices have hovered between $40 and $50 a barrel for the past year — far below the pre-collapse high of $147 a barrel in 2008. The U.S. shale revolution continues to cause a global glut in supplies of the liquid fossil fuel, depressing the price, and energy company Shell says it is bracing for a world where oil prices might stay "forever low." Oil prices have historically been highly volatile, and demand for the commodity is higher than ever. But if the glut continues, it will pose an existential threat to the monarchy ruling Saudi Arabia, which relies on oil for as much as 70 percent of the kingdom's income. Other petrostates, including Venezuela and Russia, are already in a state of economic crisis. Rabah Arezki, a commodities expert at the International Monetary Fund, says that the growing supply of natural gas, a potential electric car revolution, and the push to further develop clean energy to combat climate change all will combine to suppress demand for the foreseeable future. The world may be "at the onset of the biggest disruption in oil markets ever," Arezki says.

What is causing the glut?

The biggest factor is an American petroleum boom. Oil and gas businesses in Texas and North Dakota upended the entire industry in the late 2000s when they pioneered new fracking techniques — blasting fluid into layers of shale rock to unlock hard-to-extract oil and gas deposits. That sent a torrent of oil flooding into the market: U.S. crude output rose from 5.5 million barrels per day in 2010 to 9.2 million barrels at the beginning of 2016 — about the same as the Saudis produce. New oil from Iran and the Canadian tar sands added to the glut. American motorists are enjoying the resulting low gasoline prices, but for petrostates, it's been a nightmare.

How did these countries respond?

When oil prices collapsed in the past, Saudi Arabia used its sway over the Organization of Petroleum Exporting Countries (OPEC) to lower production and drive up prices. This time, though, Saudi Arabia, Libya, Kuwait, and other OPEC countries purposely kept pumping oil for two years to keep prices low, in hopes of driving their U.S. and Canadian competitors out of business. The Middle Eastern cartel has the advantage of sitting on vast deposits of oil that costs just $8 to $10 to extract, compared with more than $54 for most shale-oil wells, and their strategy successfully bankrupted 123 companies operating in North America. But it also had the unintended effect of driving the surviving shale rigs to become more technologically efficient, allowing those rigs to push their average break-even price down to $40 a barrel. And so the U.S. remains among the world's largest oil producers, and prices remain stubbornly low.

So what can petrostates do now?

Crown Prince Mohammed bin Salman, the bold new heir to the Saudi throne, has come up with a revolutionary plan to wean the kingdom off oil, known as Saudi Vision 2030. (See below.) In Venezuela, the collapse in the oil price has pushed the country into a seemingly unstoppable economic death spiral — while in Russia, which depends on oil prices north of $100 per barrel to meet its budget projections, the economy is mired in a deep recession. Russian President Vladimir Putin has fallen back on his "time-honored response to economic hardship," says John E. McLaughlin, a security analyst at Johns Hopkins University. And that is to "mobilize nationalist sentiment with foreign adventures," such as his incursions into Ukraine and Syria.

How are energy companies adapting?

A growing number are shifting their investment strategies to renewable energy technologies. The French oil giant Total has bought several battery and solar-power businesses; ExxonMobil is investing in biofuels and fuel-cell research. In the short term, however, oil will remain a dominant fuel source. With the developing world modernizing rapidly, demand is not expected to peak until the mid-2040s. So oil companies continue to pump and pump. U.S. oil output is expected to hit 10 million barrels a day in 2018, breaking the record set in 1970. That boom has obvious implications for climate change, and it also carries a risk for the entire oil industry.

What could happen?

If U.S. producers turn out too much oil, they could create a glut so severe it drives prices below what even the most efficient North Dakota and Texan drillers can afford. After finally cutting its own production levels last year, OPEC pleaded for U.S. shale-oil producers to do the same this May — proving how important the U.S. has become in the world of oil. "I think [OPEC] are now acutely aware that they don't have the kind of influence they used to have," says Tom Pugh, commodities economist at Capital Economics. "Shale is now the swing producer in the market."

Imagining a new Saudi Arabia

How does one of the world's wealthiest petrostates break its addiction to oil? Crown Prince Mohammed bin Salman has some bold ideas, which he's put together in the Saudi Vision 2030 project. As part of that plan, he is selling off a chunk of the state-owned oil company, Saudi Aramco, which is worth up to $2 trillion, and placing the proceeds in a sovereign-wealth fund that will invest in finance and infrastructure projects around the world. The Saudi government also plans to invest heavily in mining the country's gold, phosphate, and uranium reserves, and is also betting big on tourism. Mohammed plans to build the kingdom's own Las Vegas south of Riyadh, and the notoriously repressive kingdom will also build a new Red Sea beach resort with special laws allowing women to wear bikinis instead of covering up from head to toe. Many foreign critics say Mohammed's goal of weaning Saudi Arabia off oil by 2030 is pure fantasy; others see it as a necessity if oil prices remain low. "Vision 2030 sounds like a positive project," says Bassem Snaije, an expert in Middle Eastern economics. "I would call it Obligation 2030."