Saudi Arabia Gets a New Oil Czar

Saudi Arabia’s new oil minister, Khalid al-Falih, landed his job on May 7 in a major housecleaning by King Salman and his son Deputy Crown Prince Mohammed bin Salman. Al-Falih, who’s also chairman of the board of directors at state producer Saudi Aramco (a job he’ll hold on to), says he’ll maintain the policies of his predecessor, Ali al-Naimi, who is in his 80s. “If the market considers the appointment as signaling more of the same for Saudi policy, that could allow prices to continue following their gradual trend upward,” says Edward Bell, a commodity analyst at Dubai bank Emirates NBD.

Saudi Aramco stands ready to meet demand from customers this year as global consumption rises by 1.2 million barrels a day, Chief Executive Officer Amin Nasser told reporters at company headquarters on May 10. Nasser succeeded al-Falih last May. OPEC’s Saudi-led production increase will probably force 700,000 barrels a day of high-cost, non-OPEC crude off the market in 2016, mainly U.S. shale oil and Canadian oil produced from tar sands, says the Paris-based International Energy Agency. Saudi policy has helped send prices more than 60 percent higher since January, to above $45 recently.