Saudi oil policy holds firm after government shake-up
Saudi Arabia’s oil policy shows no signs of wavering after energy minister Khalid al-Falih avoided falling victim to the latest cabinet reshuffle.
The shake-up saw Saudi King Salman bin Abdulaziz appoint former finance minister Ibrahim al-Assaf as the new foreign minister and change key national security positions but leave the oil ministry untouched, state media reported.
Falih, who is a close ally of the king’s influential son Mohammed bin Salman, took over from stalwart Ali al-Naimi in May 2016 and has overseen a broad 1.8 million b/d production cut agreement between OPEC, Russia and other allies.
But the oil market has been rather bumpy, with oil prices falling from $86/b in October to close to $50/b in recent days despite OPEC+ embarking on a new a output cut deal to take 1.2 million b/d out of circulation next year.
With OPEC facing added scrutiny after its deal seemingly failed to put a floor under prices in the near term, the decision to retain Falih underscores the kingdom’s commitment to the current oil policy, which has seen Saudi Arabia and Russia work in unison to manage the market and attempt to keep it balanced.
The royal decree to restructure the cabinet comes after international pressure over the killing of Saudi journalist Jamal Khashoggi in October.