Who will be left standing at the end of the Oil War

From the Saudi perspective, the end game here is to break the back of U.S. shale.

The average production costs for the U.S. is about $36 per barrel, but Rystad Energy estimates that some the key U.S. shale plays have a $58-per-barrel breakeven point. This, too, varies section by section, and even well by well, so it's hard to get a concrete picture.

Here is the breakeven picture in more detail, courtesy of Rystad Energy:

Plenty of shale areas are still profitable even with oil below $30, according to Bloomberg Intelligence—just ask Texas, where the Eagle Ford shale play's Dewitt County patch, for instance, can turn a profit even with crude below $23. Other counties, though, might need $58 to be profitable.

It's all about hedging right now for U.S. shale producers. The larger percentage of oil output that's protected by hedging, the longer the lifeline.

Last week, Denbury Resources Inc. (NYSE: DNR), for instance, said it had increased its fourth-quarter hedges to cover 30 Mbbl/d at around $38/bbl.

So far, "there is little evidence of production shut-ins for economic reasons," according to Wood Mackenzie's vice president of investment research, Robert Plummer. "Given the cost of restarting production, many producers will continue to take the loss in the hope of a rebound in prices."

The breakeven is quite simply the line in the sand that determines whether extracting a barrel of oil is profitable or not. And this line in the sand is vastly different for private American producers than it is for kingdoms such as Saudi Arabia.

Everyone is hurting, some more than others. Venezuela is already on its knees. But even $30 oil isn't enough to bring the other bigger players down or to end the cold oil war. Saudi Arabia has some $600 billion in financial reserves; Russia is worried enough only to start talking to OPEC; U.S. producers are holding strong and are fairly calm, closely measuring the pace of desperation most recently indicated in the word game over an output freeze.

The variables of the breakeven game favor U.S. shale. But Saudi Arabia won't give up the cold war path easily because its ultimate goal is to preserve its market share at all costs.