Prince Abdel Aziz takes the Saudi energy helm
A new ministerial appointment may indicate growing Saudi impatience with its Opec+ allies
New Saudi energy minister Prince Abdel Aziz bin Salman has long been regarded as a potentially ideal candidate for the post. But the notion was always dismissed on the assumption that the tradition of a commoner technocrat heading the ministry would be maintained.
Now this tradition, like others since Mohammed bin Salman (MbS) rose to power under his father's auspices, has been broken.
The newly appointed minister, a half-brother of MbS and nearly twice his age, joined what was then the petroleum ministry as an advisor in the late 1980s, rising to take several junior ministerial positions. Prince Abdel Aziz had various areas of responsibility—at one point during Ali Naimi's tenure he co-ordinated a campaign to try to persuade Saudis to be mindful of energy waste. This has since become a central theme in MbS's Vision 2030 economic reform programme.
In international energy circles, Abdel Aziz was referred to simply as "the prince", a respected and liked member of the ruling family for whom further promotion appeared impossible because of his royal blood. His face became familiar at Opec meetings and other gatherings.
While he is related to MbS, the two men are very different in character and temperament. Where the crown prince can be abrasive and impulsive, Abdel Aziz is reserved and thoughtful. How their relationship will evolve remains to be seen. The likelihood is that MbS will be the architect of oil price policy, with his half-brother being the kingdom's public face at international gatherings.
Oil policy change?
The big question is whether the change of leadership at the energy ministry heralds a shift in strategy. Hints of dissatisfaction with the current state of Opec+ appear in an editorial in the influential Saudi daily al-Riyadh, beneath an article announcing the dismissal of the previous minister, Khalid al-Falih. The paper said the kingdom in August had reduced oil production to 9.83mn bl/d, well below the 10.31mn bl/d Opec+ allocation, "because it sensed danger coming to the market after some producing countries, inside and outside Opec, abandoned their commitment to produce the specific quantities agreed upon".
The kingdom did not name and shame the culprits, but has itself borne the effects of their non-compliance. The editorial went on to say that Saudi Arabia's efforts to support oil prices "may at times involve increasing production to meet shortages that may occur here or there".
Where the crown prince can be abrasive and impulsive, Abdel Aziz is reserved and thoughtful
In other words, Saudi Arabia appears to be growing impatient with making the biggest output cuts while others flaunt their Opec+ commitments—and may look to be more aggressive should further geopolitical tumults take more barrels out of the supply mix.
Shortly after Falih had been relieved of his chairmanship of Aramco, and when the industry and mining responsibilities had been removed from his ministry, the official Saudi news agency said MbS had held a telephone conversation with the Iraqi prime minister. The conversation centred on the importance of co-ordinating oil policies to support prices. It is likely the Saudi crown prince expressed dissatisfaction at what the kingdom regards as Iraq's inadequate adherence to the Opec+ deal. But the fact that MbS himself made the call, rather than Falih, was the first solid indication that the minister was soon to be out of a job.
His replacement by Prince Abdel Aziz constitutes a further consolidation of power by the Salman branch of the ruling family. Aside from the throne itself, members of the Salman line occupy the positions of deputy premier, crown prince and defence minister (MbS), energy minister (Abdel Aziz bin Salman), deputy defence minister (Khalid bin Salman), governor of Madinah province (Faisal bin Salman) and deputy governor of the Eastern province (Ahmad bin Fahd bin Salman). MbS also chairs the Council of Economic and Development Affairs and the Council of Political and Security Affairs.