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Changes in Saudi cabinet: towards a much stronger Saudi Arabia

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The recent news of the Saudi oil minister’s removal, after a 20-year mandate is being interpreted by many analysts as the kingdom gearing up for major change and a power-play on world oil markets. “You’re going to see a much more robust Saudi Arabia going forward. There’s no question about it,” told one such observer to CNBC’s “Squawk Box.”
Saudi Arabia is likely to maintain its high crude production policy, which prevents oil prices from bouncing back and allow high-cost producers like U.S. shale frackers from breaking even. This strategy is also said to be closely related to its rivalry with Iran, which is working hard to increase its market share now that key economic sanctions have been lifted.

Al-Naimi, 80, who’s been in office since 1995, has long been the face of the Saudi energy policies. His seat will soon be filled by Khalid al-Falih, currently chairman Saudi Aramco.

As for any possibility of slowing down production any time soon, deputy crown prince Mohamed bin Salman announced that any change in policy will have to be replicated by Iran. Which doesn’t seem to be in the works, since Iran is eying a bigger slice of the pie.

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