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Saudi king names his son, an industry insider, as oil minister
SAUDI Arabia's king named his son Prince Abdulaziz bin Salman as energy minister, installing a royal family member at the helm of the kingdom's oil policy for the first time.
Prince Abdulaziz, a longtime top energy ministry official, is half-brother to Crown Prince Mohammed bin Salman, but the two are not believed to be close and are quite far apart in age. The prince replaces Khalid al-Falih, whose future had been uncertain over the past week after he was stripped of his responsibility for overseeing industrial development and removed as head of Saudi Aramco.
Mr Al-Falih had been the face of Opec diplomacy over the past three years as the producers' group joined other major producers, most notably Russia, in an attempt to counter the rising tide of US shale oil that flooded markets. The new minister takes charge as the world's biggest oil exporter tries to bolster prices at a time when a raging trade war between the US and China weighs on global demand.
Prince Abdulaziz, who most recently served as state minister for energy affairs, is widely seen as a capable and experienced technocrat. In his former role, he oversaw a breakthrough in talks with fellow Opec member Kuwait to resume output in the neutral zone between the two countries after a four-year halt.
"Prince Abdulaziz is a very seasoned veteran of Saudi and Opec policy making," said Bob McNally, president of Rapidan Energy Group. "He won't have a learning curve. I don't expect any big rupture in current Saudi oil policy or relations with Russia."
Saudi Arabia has cut production to less than 10 million barrels a day as part of an agreement with the Organization of Petroleum Exporting Countries to limit output and support prices. The Saudis are doing the most to support the deal, pumping about 500,000 barrels a day less than they pledged.
Opec and its allies, known collectively as Opec+, are scheduled to meet on Sept 12 in Abu Dhabi to review their strategy to help balance global oil markets.
It's not immediately clear whether the prince's appointment reflects a desire to change oil policy as opposed to the king's dissatisfaction with Mr Al-Falih, who was reportedly pushing back against the possible initial public offering of Aramco.
Either way, Mr McNally and other analysts said they don't expect the kingdom's priorities to be different under the new minister. "The priority remains removing the lingering threat of another crude price swoon by preventing stock builds," he said.
Majd Dola, a portfolio manager at First Abu Dhabi Bank, said that while the prince may bring "new tactics" to the negotiations over global oil policy, the forces affecting prices at the moment were beyond the kingdom's control. "If you look at oil from a macro perspective I don't think at the moment we're facing a supply issue," he said. "The trade war is weighing down on growth and that's weighing down on oil." BLOOMBERG