CNBC, May 9, 2016 - Saudi Arabia's decision to replace its once-influential oil minister is being viewed widely as the latest effort of Deputy Crown Prince Mohammed bin Salman to consolidate power and pursue what one analyst has called a 'brutal battle for market access against arch regional rival Iran.'
In a far-reaching government shake-up, Saudi Arabia issued a royal decree on Saturday in which it announced it was replacing Ali al-Naimi, who had been oil minister since 1995 and a prominent figure in 12-country oil producer group OPEC , with Khalid al-Falih, the chairman of state-owned oil company Aramco.
The move was widely predicted as al-Naimi seemed to have lost his authority at the last OPEC meeting in April in Doha when the group decided not to freeze oil production at current levels in a bid to support global oil prices.
Then, Saudi Arabia – the de-facto leader of OPEC – had initially signaled support for the freeze agreement, only to take a last-minute U-turn following intervention by the increasingly powerful and prominent 30-year old prince Mohammed bin Salman, who insisted that there would be no deal without Iranian cooperation.
Against this backdrop, some analysts are noting on Monday that the Saudi reshuffle is not only about Saudi Arabia's strategy over oil – to maintain its market share and pressure rival non-OPEC producers rather than to support prices by cutting output – but is really part of the shifting balance of power within the Saudi monarchy and rising tensions with its neighbor, Iran.
