Oil Market Sees Increased Conflict Risk in Saudi Power Shift

22 Jun 2017   Saudi Arabia

New Crown Prince has taken confrontational stance against Iran More aggressive foreign policy won’t change oil plans: Sen After Mohammed bin Salman’s appointment as crown prince, energy markets need to brace for an even more assertive Saudi Arabian foreign policy that could threaten regional stability in the heart of the global oil industry. The 31-year-old has already supported the kingdom’s involvement in a war in Yemen and broken diplomatic ties with fellow OPEC member Qatar. Both moves were driven by a confrontational stance toward Iran, and MbS, as the prince is known, has already let the intensifying regional rivalry spill into oil policy — last year, he intervened to sink a deal to freeze production because Iran refused to participate. Nonetheless, his government will need higher crude prices to push ahead with his plans to reform the kingdom’s economy, and that makes an immediate change in oil policy unlikely. […]

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