Baku, Azerbaijan, April 29
By Aygun Badalova - Trend:
The reshuffle at the top of Saudi Arabia's government probably has more political than economic implications, Jason Tuvey, Middle East economist at British economic research and consulting company Capital Economics believes.
"In particular, it means that any hopes for a swift end to the Yemen conflict have probably been dashed," Tuvey said in a report obtained by Trend.
Meanwhile, Ali al-Naimi's departure as Chairman of Saudi Aramco is unlikely to mark any significant changes to the Kingdom's oil policy, he said.
Saudi Arabia's King Salman bin Abdulaziz sacked his younger half-brother as crown prince and appointed his nephew, deputy crown prince Mohammed bin Nayef, as the new heir apparent, Reuters reported. He also appointed his son, Prince Mohammed bin Salman, as deputy crown prince, and made several other ministerial changes.
Saudi reshuffles often move oil prices, as stability in the world's biggest oil-exporting country is key to global supplies, but the April 29 announcement had little obvious impact. Brent crude oil was down 24 cents at $64.40 a barrel by 1035 GMT. U.S. crude was down 36 cents at $56.70.
The Saudi reshuffle touched the oil sector. The chief executive of state oil firm Aramco, Khalid al-Falih, was appointed health minister, according to the Saudi Press Agency (SPA).
Saudi-owned al-Arabiya television also said he had been named chairman of Aramco, a position hitherto held by Oil Minister Ali al-Naimi, who kept his ministerial post.
Tuvey believes that the departure of Ali al-Naimi as Chairman of Saudi Aramco should not have any significant implications for the oil market.
"After all, Mr. al-Naimi retains his post as petroleum minister. Moreover, in his previous role as Chief Executive of Aramco, Khalid al-Falih played an important role in forming Saudi Arabia's response to the fall in oil prices. If he were to be appointed petroleum minister when Mr. al-Naimi steps down, as seems likely, he would almost certainly maintain the Kingdom's current oil policy," Tuvey said in a report.
Tuvey also believes that of perhaps greater significance from an economic perspective was the appointment of Adel Faqeeh as Economy Minister.
In his previous role as Labour Minister, Mr. Faqeeh was responsible for the implementation of the Nitaqat programme, which is designed to get more Saudis into work in the private sector, said the economist.
"We've argued before that, in light of lower oil prices and the need to restrain public sector employment, the authorities could step-up efforts at "Saudisation". And Mr. Faqeeh's appointment means that this is looking more likely," Tuvey said.