Last weekend saw biggest power consolidation in Saudi Arabia and revealed who exactly are the new power figures in the kingdom. Saudi king Salman appointed new chiefs in several key departments, including country’s most vital oil industry.
Oil minister Ali-al-Naimi, who has been Saudi Arabia’s most prominent figure for last two decades got removed from his position and will now be the adviser to Saudi court. 80 year old Mr. Naimi, joined the industry when he was 12 years old and became the country’s oil minister in 1995. For years Mr. Naimi’s words were closely followed by global oil industry and he alone was sufficient to shake up the market with just few words. He enjoyed almost autonomy in decision making under both King Fahd and King Abdullah. But under the new king, Salman, deputy crown prince Mohammad bin-Salman has grown into prominence.
He is now the main man behind economic and oil policy. He has already announced 5% stake sale of Saudi state owned oil giant Saudi Aramco and plans to reform the kingdom such way that it doesn’t depend on just oil revenue. It has been named Vision 2030.
Much younger, Mr. Khaled al-Falih, 55, chair of Saudi Aramco will be the new oil minister, who is more aligned with Deputy prince MbS further establishes the role of new strongman of Saudi Arabia.
From now the wording of him, will be the key for oil market and for now, he says diversify and no action without Iran.
So far, oil has taken up the changes in positive stride. Brent is up 1.6% today, trading at $46/barrel.