Saudi Arabia has made it abundantly clear that the latest shake-up in the top echelons of its energy sector will not shift its commitment to supply curbs, writes Nassir Shirkhani.
The country's new Energy Minister Prince Abdulaziz bin Salman went out of his way at the World Energy Council event in Abu Dhabi this week to hammer home the message, emphasising the need for continued, coordinated cuts between Opec members and non-members such as Russia.
Market management is key to Saudi Arabia's goal of achieving high prices to balance its budget and ensure the success of the planned initial public offering of oil giant Saudi Aramco.
The flotation, which could be the world’s biggest IPO, is crucial for Crown Prince Mohammed bin Salman’s plans to diversify the Saudi economy away from oil revenues.
To keep a floor under the market, Saudi Arabia has led efforts to curb production in partnership with Opec and Russia since 2017 after abandoning a previous policy of maximum production aimed at driving US shale producers into the ground.
Prince Abdulaziz will not have the powers enjoyed by his predecessor Khalid al-Falih who was also acting as Aramco chairman.
The reduced role will, however, leave him to focus more on oil policy.
From now on, Aramco will have an “arms-length” relationship with the Energy Ministry, said Aramco chief executive Amin Nasser.
However, the guidelines for production will come from the ministry whose main task now is to keep a tight lid on production to generate more revenues for the ambitious Crown Prince.
