Royal oil diplomat takes the reins in Saudi Arabia
The energy industry veteran takes up his role at a critical time, as Riyadh pursues ambitious economic diversification plans
Saudi Arabia's new energy minister, Prince Abdulaziz bin Salman, says there will be no major shift in the Opec linchpin's oil policy. But, as the first royal ever to hold the portfolio, his tenure will see changes of emphasis at home and abroad.
"Fundamentally, Saudi Arabia's energy policy is resting on a few pillars. The pillars do not change," Prince Abdulaziz told the World Energy Congress in Abu Dhabi on 9 September. But a subtle shift in Saudi policy making emerged at the Opec/non-Opec Joint Ministerial Monitoring Committee (JMMC) meeting in Abu Dhabi a few days later. The JMMC's top agenda item focused on extracting pledges of better compliance from producers that have persistently flouted their output quotas — a goal the new minister pursued with single-mindedness.
Describing himself as a "consensus builder", Prince Abdulaziz says he aims to make decision-making "more inclusive" in a producer group increasingly seen by other members as dominated by a Saudi-Russian duumvirate. But he caveats this with another message: "I promise you, I will be more forthright. I will speak my mind often." Having extracted an official compliance pledge from Iraqi oil minister Thamir Ghadhban, Prince Abdulaziz will lead a delegation of Opec and non-Opec officials to Baghdad this month, because he says "the courteous thing to do is to visit them and thank [them] in person". Given Iraq's past intransigence, Saudi Arabia had not planned to travel to Iraq.
Prince Abdulaziz, an elder half-brother of powerful royal heir Crown Prince Mohammad bin Salman, is a 30-year plus veteran of the energy ministry, with a long list of achievements in his own right. Alongside his former boss at the ministry, Khalid al-Falih, he has played a leading role in spearheading the Saudi-Russian axis that has put its stamp on Opec+ since 2016. And diplomatic outreach — to other oil producers and leading oil consumers — has been the fulcrum of his career. He was a key architect of the ground-breaking International Energy Forum, which provided the first platform for producing and consuming countries to work together.
Within Saudi Arabia, Prince Abdulaziz's role as energy minister will inevitably differ from that of his predecessor al-Falih, who was removed by King Salman bin Abdul-Aziz on 8 September. One Opec official noted that while "al-Falih was a hard-driving technocrat, the prince is a hard-driving diplomat". The prince assumes his new role at a critical period, as Riyadh powers ahead with an ambitious economic diversification agenda. He has been heavily involved in policies aimed at improving energy efficiency in Saudi Arabia, and this is expected to remain a major focus of a ministerial role centred on regulating the oil, gas and electricity sectors. But as the new minister will not hold the dual post of board chairman at state-owned Saudi Aramco, he is unlikely to be actively involved in the planned initial public offering (IPO) of a 5pc stake in the firm.
Too big to succeed
Riyadh has given no official explanation for al-Falih's sudden fall from favour with Crown Prince Mohammad. Slow progress in pushing through the IPO may have played a role. At the same time, al-Falih came in for criticism for not pushing hard enough for growth of the industrial sector, which came under his remit with the expanded mega-ministry of energy, minerals and industry in 2016 — a key driver of the crown prince's Vision 2030 economic diversification plan. Ultimately, the much broader portfolio proved too big for al-Falih to deliver on its ambitious targets.
Al-Falih's former role was upended first on 30 August, when the ministry was broken up, then on 6 September by the appointment of Yasir al-Rumayyan, governor of Saudi Arabia's PIF sovereign wealth fund, as new chairman of Aramco. His ultimate removal came just days ahead of the JMMC meeting on 12 September.
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Tankers can take TMX crude mid-May: Trans Mountain
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Canada’s TMX pipeline ready to move crude: Update
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New US rule may let some shippers swap railroads
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