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Saudi Arabia's Surprising Leadership Move Unlikely To Have Impact On Oil Prices

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Saudi Arabia's Surprising Leadership Move Unlikely To Have Impact On Oil Prices
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Saudi Arabia's ruling family made a surprise move in which King Salman's son, 31-year-old Mohammed bin Salman bin Abdulaziz, will now be first in line to succeed as ruler of the country, CNBC reported.

The 31-year-old has also been named deputy prime minister in addition to maintaining his title as defense minister. He has also played a role in creating Saudi Arabia's Vision 2030 plan, which calls for billions of dollars in investments to promote economic growth in non-oil sectors.

Bin Salman has met with President Trump on two occasions, once in Washington and again in Saudi Arabia. His friendly approach towards the U.S. administration could be a result of his desire to maintain U.S. support and backing against rival Iran.

His new title and future responsibilities comes at a time when the oil market is officially in bear territory for 2017. For the time being at least, the government's shuffle isn't expected to have any impact on the oil market, Amrita Sen, chief oil analyst at Energy Aspects, told CNBC.

Saudi Arabia remains on track to proceed with an initial public offering of Saudi Aramco next year and a successful outcome relies on higher oil prices, Sen added.

RBC Capital Markets' global head of commodity strategy Helima Croft offered a similar take. She told CNBC that Saudi Arabia's strategy for the time being is to "sit tight" and hope the expansion of a 2016 OPEC agreement will support prices.

"I don't think they're worried about the next couple of weeks," she said. "I think they're playing for 2018."

Related Links:

Emerging Market: Saudi Arabia On MSCI's Radar

Saudi Arabia And Qatar's Diplomatic Fallout, Explained

Image: By U.S. Department of State from United States [Public domain], via Wikimedia Commons

Posted-In: King Salman Mohammed bin SalmanCNBC News Commodities Global Markets Media Best of Benzinga

 

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