The death of Saudi Arabia’s King Abdullah bin Abdel-Aziz was a well-managed affair. His admission to hospital for “tests”, followed days later by the diagnosis of pneumonia, then a period of dignified silence, and finally the inevitable announcement of his demise.
His successor had long been in place, but the successor’s successor was unnamed until today. The anointment of new king Salman bin Abdel-Aziz’s nephew, the middle-aged Mohammad bin Nayef bin Abdel-Aziz, as deputy crown prince makes the generational leap needed to secure regal continuity in a period of acute regional instability exacerbated by the oil price collapse.
The Bay’ah (Allegiance) Council’s endorsement is an important signal that the whole sprawling Saud clan is reconciled to the decision.
Brent crude traded a couple of bucks higher after the death, noticeable but hardly dramatic. This calm reaction indicated not only of an oversupplied and heavily-stocked market but also of confidence in Saudi stability.
The “let the market decide” strategy foisted on Opec by Saudi oil minister Ali Naimi on 27 November is not open to challenge. As early as 1 December, the cabinet, chaired by Salman, underwrote the minister’s authority, pronouncing that Saudi Arabia’s oil policy “is based on economic criteria with the aim of achieving the kingdom’s short-term and long-term economic interests, as we well as the interests of producers and consumers”.
Any misgivings in the country about the strategy may have been eased by indications from some quarters that it may already be working. The IEA has slashed its forecast of non-Opec supply growth in 2015 and US onshore rig counts are down.
What does remain to be seen is whether the royal succession will be accompanied by a ministerial succession. Today was not the day to shake up the cabinet and the new king said all ministers remain in place.
But Naimi has indicated in the past that he would like to retire, though that is a decision that is not his to make. His relationship to the deceased king was close, so maybe this is the chance for him to make an exit.
His long-time deputy has been prince Abdul Aziz bin Salman, a son of the new king. He is hard working and respected but deputy does not mean understudy.
The Saudis do not play around with their oil industry. They know they need competent oil technocrats to run it. Naimi came to the post after heading up Aramco. And, when Naimi’s deserved retirement comes, the royal family that holds power so tenaciously is likely to look in that direction again, to another commoner.
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