I think it is similar to Germany's WWI 'gamble' of fighting a war on two fronts. Everyone knew this was a very bad idea, but it was thought that the gamble just might work if they could knock France out quickly. The house of saud knows they are sitting on a demographic time bomb in a world where renewables are getting cheaper every day. When you feel your options are limited you tend to take risks that are not wise.

One theory is that Saudi is keeping prices low to try and destroy the US shale industry.

Another is that OPEC is no longer operating as a cartel and Saudi couldn't persuade other governments to cut production to boost prices so they didn't want to lose their own market share.

Saudi may be in trouble, but we're more likely to see instability in other petro-states first, especially Venezuela.