• 3 hours India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 8 hours Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 12 hours Russia, Saudis Team Up To Boost Fracking Tech
  • 18 hours Conflicting News Spurs Doubt On Aramco IPO
  • 19 hours Exxon Starts Production At New Refinery In Texas
  • 20 hours Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 2 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 2 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 2 days China To Take 5% Of Rosneft’s Output In New Deal
  • 2 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 2 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 2 days VW Fails To Secure Critical Commodity For EVs
  • 2 days Enbridge Pipeline Expansion Finally Approved
  • 2 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 2 days OPEC Oil Deal Compliance Falls To 86%
  • 2 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 3 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 3 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 3 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 3 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 3 days Aramco Says No Plans To Shelve IPO
  • 5 days Trump Passes Iran Nuclear Deal Back to Congress
  • 5 days Texas Shutters More Coal-Fired Plants
  • 6 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 6 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 6 days Chevron Quits Australian Deepwater Oil Exploration
  • 6 days Europe Braces For End Of Iran Nuclear Deal
  • 6 days Renewable Energy Startup Powering Native American Protest Camp
  • 6 days Husky Energy Set To Restart Pipeline
  • 7 days Russia, Morocco Sign String Of Energy And Military Deals
  • 7 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 7 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 7 days India Needs Help To Boost Oil Production
  • 7 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 7 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 7 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 7 days District Judge Rules Dakota Access Can Continue Operating
  • 8 days Surprise Oil Inventory Build Shocks Markets
  • 8 days France’s Biggest Listed Bank To Stop Funding Shale, Oil Sands Projects
  • 8 days Syria’s Kurds Aim To Control Oil-Rich Areas
Richard Branson To Invest In Elon Musk’s Hyperloop One

Richard Branson To Invest In Elon Musk’s Hyperloop One

Britain’s Virgin Group boss has…

Is OPEC Considering Deeper Output Cuts?

Is OPEC Considering Deeper Output Cuts?

You could argue OPEC and…

Saudi Oil Minister Remains In Place After Shakeup

Saudi Oil Minister Remains In Place After Shakeup

 

The leadership shakeup by Saudi King Salman bin Abdulaziz al-Saud completely changed the kingdom's line of succession, bringing in younger heirs and abandoning the practice of reserving the throne for sons of the kingdom’s founder.

But one man whose job is safe is Ali al-Naimi, the minister of petroleum and mineral resources, an indication that while blood may be thicker than water in most societies, in the Saudi kingdom oil may be thicker than blood.

A brief look at the new leadership lineup announced April 29 in Saudi Arabia, the world’s most copious oil producer, shows that King Salman replaced the crown prince, his elderly half-brother Prince Muqrin, with the younger Mohammed bin Nayef al-Saud, Salman’s nephew. Salman’s son, the young Defense Minister Mohammed bin Salaman, was elevated to deputy crown prince, second in line to the throne.

Related: Oil, The Fed And The Ugly Truth About Capital Markets

This was a break from Saudi tradition. Until now, the line of succession always had included the sons of King Abdul-Aziz Al Saud, who founded the kingdom in in 1932 and died in 1953. The reason is the age and, in many cases, the poor health of the heirs who may not be up to the challenge of ruling the kingdom in the 21st century.

Salman, 79, became king on January 23 upon the death of his half-brother, King Abdullah. At the time, Saudi Arabia faced rare challenges ranging from a rise in Islamic extremism in the Middle East, including neighboring Yemen, and the price of oil, the country’s chief commodity, which has been at a record low.

Related: HSBC Advises Clients To Get Out Of Fossil Fuels

But despite his own advanced age of 79, al-Naimi was spared. Having served as the kingdom’s oil minister since 1995, he’s widely viewed as the mastermind behind OPEC’s decision in November not to cut oil production below its current level of 30 million barrels a day, which would have reduced supply and bolstered prices that had been plunging since late June 2014.

That decision, reached over the objections of needier countries in the 12-member cartel, began a price war with independent producers who had been ramping up production and intruding on OPEC’s market share. Most notable was the United States, whose production of shale oil was shifting the country’s status from the cartel’s biggest customer towards a major competitor.

Related: Why The US Should Worry About Oil Sector Jobs

But US producers relied heavily on hydraulic fracturing, or fracking, a relatively expensive way to extract oil and other energy from underground shale formations. Al-Naimi’s strategy of keeping prices low was meant to make fracking for shale oil unprofitable and help OPEC regain lost market share. That approach has been showing some signs of success lately.

This policy is a shift from Saudi Arabia’s traditional role as a swing producer, a country with enough flexibility – and oil – that strives to adjust output to maintain prices that are both attractive to customers and lucrative for producers. Al-Naimi’s survival is a signal that King Salman is satisfied with his country’s new oil policy.

At least that’s the view of Clement M. Henry, a professor at the Middle East Institute of the National University of Singapore. “I don’t think there’s been any disagreement [within the Saudi leadership] about the idea of keeping up production, maintaining market share, refusing to be a swing producer,” he told Reuters.

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News