Saudi Arabia has a problem. For many years, the kingdom, along with its allies, has been able to move the price of oil on world markets at will. This resulted, among other things, in two crises; in Germany there was the "oil price shock" in the years 1973 and 1979.
But recently, Saudi Arabia has come to realize that the old levers no longer produce the desired effect. More than once, in recent months, the country has agreed with other oil extraction nations to cut production to drive up the price, from the current $ 60 to about $ 80.
Talks were held not only with the other members of the Opec cartel, but Energy Minister Chalid al-Falih also brought the Russians on board for the latest reduction in production in August.
Only: The oil price has left largely cold. He has been commuting between $ 60 and $ 70 a barrel for months - well below the $ 80 mark that the kingdom wants to reach to have enough money for the lofty plans of King Salman's son, Crown Prince Mohammed bin Salman. The only major spikes were crises - US tensions with Iran and the decline of Venezuela.
Money sought for the "Vision 2030"
This has consequences. Energy Minister Chalid al-Falih loses his post. Al-Falih, in office since 2016, seems to have "paid the price for the stubborn oil price," the Financial Times quoted energy expert Derek Bower, director of the RS Energy Group. The step will fuel the nervousness in the energy market, warns the expert. The post will be taken by Prince Abdulaziz, King Salman's fourth son. He is well versed in energy issues, since 1980 he works in the Ministry of Energy.
Abdulaziz had previously taken over the supervision of the state-owned energy giant Saudi Aramco. The leadership wants to actually bring the group to the stock market, which should fill the cash for the project "Vision 2030", with which the Crown Prince wants to make the economy of the country independent of fossil fuels. For the IPO of Aramco, he needs favorable conditions - for example, high oil prices.
There are several reasons for the dwindling influence of Saudi Arabia on the price of oil. For example, other producing states have become more important in recent years, for example Russia, but also the USA. Fracking technology has triggered a boom in oil production there.
