DUBAI Jan 23 Saudi Arabia's new King Salman was
quick to keep veteran oil minister Ali al-Naimi on Friday in a
message aimed at calming a jittery energy market mindful of
Naimi's powerful role within the OPEC group of oil-exporting
King Abdullah died on Friday and was succeeded by his
brother Salman. In his first address to the nation King Salman
vowed to maintain the same approach as his predecessors.
The 79-year-old Naimi has been a leading figure in the
market for two decades and successfully argued in November that
OPEC should hold output steady despite a sharp fall in oil
prices in order to safeguard market share.
That policy is unlikely to change under Salman, analysts
"What is happening now is Kingdom policy, not just the
King's policy," said analyst Yasser Elguindi of Medley Global
Advisors. "The Kingdom will continue to make policy based solely
on economic rather than political considerations. The oil weapon
has long been defunct."
With Naimi to stay for now, analysts said the focus was on
for how long, as his departure could impact Saudi policy, OPEC
and oil prices generally.
"Naimi is very likely to stay in the short run, not to make
it look like the new king is gearing up for a policy change...
there was talk he would be handing over in the coming year or so
...In fact, this might delay his retirement somewhat," said
analyst Samuel Ciszuk of the Swedish Energy Agency.
"I think it will be difficult to change ministers in the
current situation. If Naimi goes I would think that he would
prefer to go after there is some order put back into OPEC," said
Olivier Jakob from consultancy Petromatrix.
SUCCESSORS, OPEC COHESION
Naimi's successor would be just the fifth oil minister in
Saudi history. His predecessors were Abdullah al-Tariki
(1960-1962), Ahmed Zaki Yamani (1962-1986) and Hisham Nazer
Khalid al-Falih, chief executive of state giant Saudi
Aramco, and Saudi Deputy Oil Minister Prince Abdulaziz bin
Salman are among the top contenders for the position, analysts
Naimi was promoted to the top oil job in 1995 after joining
Saudi Aramco at the age of 12 as an office boy and rising to
One of Saudi Arabia's highest ranking non-royals, he is
credited with deftly handling OPEC politics. He has also
survived more than one price crash, including a fall of more
than $100 a barrel in the latter half of 2008.
At that time he led OPEC as it implemented its biggest ever
Yet still haunted by its failed attempt to prevent a steep
drop in oil prices by slashing output by almost three quarters
in the 1980s, Riyadh is determined not to make the same mistake
Saudi Arabia's oil policy involves maintaining spare output
capacity to help stabilise prices and a reluctance to interfere
in the market for political reasons.
Yet Naimi has enjoyed great clout over these decisions and
been granted wide scope to interpret and implement policy in the
way he thinks best.
There is no guarantee that his successor would enjoy the
same privileges within the Kingdom or OPEC, or would pursue the
same market strategy.
Riyadh and its Gulf OPEC allies say it is time for others,
such as Russia or U.S. shale drillers, to slow down; OPEC can no
longer slash output, ceding market share, to spare them a
They argue that low oil prices will stimulate demand and
slow output from high-cost producers without requiring OPEC to
(Additional reporting by Angus McDowall in Riyadh; editing by