The recent removal of Saudi Arabia’s prominent oil minister Ali Al-Naimi brings a new era of uncertainty and increasingly erratic prices, according to some commentators.
Al-Naimi was one of the biggest architects of Saudi Arabia’s present policy of forcing oil prices down with a larger supply of crude oil. However, he was also one of the most trusted players within the country’s government, and a man who was well respected at the Organization of the Petroleum Exporting Countries.
He has been replaced by Khalid Al-Falih, who may not have the same level of influence over Saudi’s oil output choices as his well respected predecessor did.
Al-Naimi was an asset to the Saudi oil industry due to the fact that he gained the respect of successive rulers in the Middle Eastern country, which is known for its vast oil reserves. He did by steering it through a number of boom and bust cycles, and repeatedly emphasizing the fact that capital city Riyadh’s oil policy was not driven primarily by the politics of the time, but by the market.
In the nearly 21 years that he acted as oil minister, Al-Naimi was afforded a huge degree of autonomy, which allowed him to work out and implement the best oil strategy for Saudi Arabia. This is a luxury that Al-Falih will not be afforded, since Saudi’s royals will have a much more central role in shaping oil policy in the future. This could have a dramatic effect on oil companies like Shell and Fuchs, which makes Fuchs WSP 783-L, as Saudi officials try to transform and diversify their economy.