“He was the de facto leader of OPEC, given Saudi Arabia’s position”, he said.
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Instead of cutting oil production to lift prices, al Naimi insisted on continuing his strategy to protect Saudi Arabia’s market share, even if the falling prices damaged its economy. Prior to that role he’d served as the president of oil giant Aramco.
As part of the Saudi Vision 2030 plan unveiled last month, the OPEC kingpin announced it will sell less than five percent of Aramco in what officials say will be the world’s largest ever initial public offering.
OPEC holds another meeting in June. The U.S. Energy Information Administration also raised its 2017 domestic oil production forecast to 8.19 million barrels from a prior estimate of 8.04 million, though that would still be down from an expected8.6 million barrels this year.
The result of this selective briefing system, which is unlike any practiced in other commodity and financial markets, has been confusion and a lack of clarity, with much dissatisfaction on both sides.
Oil prices dropped to their lowest level in over a decade earlier this year as producers pumped more oil than the world needed. Despite efforts to limit reliance on its main export, oil accounted for more than 70 percent of the state’s revenue in 2015.
Proceeds from the sale will contribute to creating the biggest government investment fund in the world, with a value of $2 trillion, whose profits can provide an alternative to plunging oil revenues.
In the last two years, under Naimi and his advisers, the Saudis have already taken some tentative steps towards greater openness, for example releasing transcripts of important ministerial statements.
State-owned Saudi Aramco is officially planning to increase output, despite the prevailing glut and depressed oil prices, citing an expected rise in demand this year.
Al-Falih spent his entire career at Aramco.
Born in 1960, Falih joined Aramco in 1979, and went to study engineering at Texas A&M University in 1982 on an Aramco sponsorship programme.
Saudi Arabia will probably keep producing crude at near-record levels under its newly appointed oil minister, Khalid Al Falih, as the world’s largest exporter sticks with his predecessor’s policy of defending market share against higher-cost shale. The other replacements include the ministers of hajj, commerce and industry, social affairs, health and transportation.
“You’re going to see more action, direct action on their part going forward”. “There’s a new king, new power behind the throne, and now you have a new oil minister”.
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The shake-up also saw the country’s labor and social affairs ministries merged into a single ministry.
