FXStreet (Mumbai) - With one quarter of the world’s known oil reserves (more than 260 billion barrels) in its possession, Saudi Arabia is the world’s largest producer and exporter of oil. As the world’s largest producer and exporter of oil, the oil rich nation plays a unique role in the global energy industry. Its policies on the production and export of oil have a considerable impact on the energy market, and in the process on the global economy. Saudi Arabia to continue to pump more oil into the market Saudi Arabia started thinking of a change in their oil policy back in 2013 to boost their market share. It decided to mark a shift in its oil policy- to defend market share rather than cut output to prop up prices as they had for years. The kingdom abandoned its policy of reducing supplies to stabilize price. The shift became public when OPEC in November 2014 refused to cut supplies despite falling prices. Khalid al-Falih, chairman of the state-owned Saudi Arabian Oil Company, Saudi Aramco said, "The only thing to do now is to let the market do its job,". "There have been no conversations here that say we should cut production now that we've seen the pain." Shift in oil policy working fine for Saudi Arabia Though oil has been trading at below $50 a barrel, less than half its level of June 2014, Riyadh says the strategy is working. Crude exports from Saudi have been rising steadfastly from a 2014 low. Saudi crude exports amounted to around 8.1 per cent of the global market since November 2014, after having fallen to 7.9 per cent in 2014. As per the Reuters analysis of International Energy Agency data, shipments in the first half of 2015 to European members of the Organization for Economic Cooperation and Development (OECD) were the highest since 2006 and averaged at 4,153 kilotonnes per month, or about 1.01 million bpd. Criticism of its policy stance Saudi Arabia caused quite a stir in the oil market last November when Opec decided against production cuts. Since then, the oil price has collapsed from a high of $115 a barrel last year to $50 a barrel. Its latest decision to stick to its policy of increasing its market share, will disappoint global oil companies, which have put hundreds of billions of dollars of investment on hold as a result of low prices. The effect of the policy propagated by the Saudi oil minister Ali al-Naimi on business sentiment has sparked domestic criticism as well. Balance will be restored in the market in 2016 and then demand would start to suck up inventories. Officials are of the opinion that it would probably take one to two years for the market to clear up the oil market glut; prices will then begin to recover towards $70-$80 a barrel. The decision is a mistake According to a former central bank governor of Nigeria, Saudi Arabia's decision to flood world markets with oil is a mistake. He said he cannot confidently say whether the policy benefits the kingdom itself. Also he pointed out that the policy enhances the risk of Saudi Arabia draining itself out. He said he had his doubts whether accelerating production would ever ‘pay dividends’. In his opinion OPEC is only trying to get back market share from U.S. oil producers. Saudi Arabia to stick to its strategy Saudi Oil Minister Ali al-Naimi had said back in June that the strategy is working. seeing the strategy as long-term the country currently shows no signs of changing its course. It must be remembered here that though 2015 has pronounced success for Saudi Arabia’s market share strategy, the next year will not be as smooth if sanctions are lifted on Iran and fellow OPEC rival Iraq boosts exports further. Saudi Arabia is however not yet ready to consider either the challenges or the financial pain inflicted by its oil policy on the economy. For now it looks determined to stick to its policy of pumping enough oil to protect its global market share. It does not look like the kingdom will change track ahead of the December 4 meeting in Vienna of the producers' cartel Opec. For more information, read our latest forex news.