State with a well oiled economy (6)
I believe the answer is:
kuwait
'state' is the definition.
(Kuwait is an example)
I don't understand how the remainder of the clue works.
Can you help me to learn more?
(Other definitions for kuwait that I've seen before include "monarchy" , "Arab kingdom, major source of oil" , "Oil-rich country" , "Gulf state" , "in Middle East" .)