Bloomberg
Saudi Arabia’s King Salman dismissed Energy Minister Khalid Al-Falih and replaced him with one of his sons, putting a royal family member in charge of oil policy in the world’s largest crude exporter for the first time.
Prince Abdulaziz bin Salman, a longtime top Energy Ministry official, is an older half-brother to the Crown Prince Mohammed bin Salman.
Analysts and officials said the decision is unlikely to signal a change in the kingdom’s oil policy.
The prince, 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.
Saudi Arabia has cut production to less than 10 million barrels a day as part of an agreement with the Organisation of Petroleum Exporting Countries to limit output and support prices.
A Russian official said his country intends to maintain its critical oil alliance with Saudi Arabia even after the removal of Al-Falih, who had built a strong relationship with Russian Energy Minister Alexander Novak. The official, who asked not to be identified, said Prince Abdulaziz has played an important role to boost cooperation between the two countries.
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.
Until Prince Abdulaziz’s overnight appointment, the oil ministry had been headed by civilian technocrats since 1960. His elevation concentrates more power within the immediate family of King Salman, who ascended to the throne in 2015.
His son, Crown Prince Mohammed, controls the levers of policy from security to energy, though he and the new energy minister are far apart in age and aren’t believed to be close.
The king also appointed another son, Prince Khalid Bin Salman, as deputy defense minister after serving as ambassador to the U.S.
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,†said Bob McNally, president of Rapidan Energy Group.
Following an eight-year stint as an adviser to the late Saudi Oil Minister Hisham Nazer, Prince Abdulaziz became Deputy Oil Minister in 1995, a post he occupied until 2004, when he was named assistant to the minister. He headed a team of ministry officials and Aramco executives to lay out and update the kingdom’s oil strategy, according to the ministry’s website.
He was also in charge of a committee to regulate domestic energy and water prices as part of the government’s plan to reduce subsidies.
Majd Dola, a portfolio manager at First Abu Dhabi Bank, suggested 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 told Bloomberg TV. “The trade war is weighing down on growth and that’s weighing down on oil.â€