An oil king dies
Maybe it was appropriate that his last message to his subjects surrounded crude oil. Saudi Arabia's King Abdullah bin Abdul-Aziz died after a long bout with pneumonia, giving oil a boost even in the face of a soaring dollar and a historic step by the European Central Bank to move towards quantitative easing.
While the new king Salman bin Abdul-Aziz Al Saud is sending signals that the Saudi oil policy won't change, the uncertainty and controversy surrounding the Saudi oil policy is creating at least some uncertainty and support in global oil markets.
As concerns grew about the OPEC price war that was started by Saudi Oil Ali Al-Naimi drove down oil prices, he promised from his hospital bed that Saudi Arabia would have "safety and stability." He said in a speech that was read by the new King Salman that oil market "tensions were caused by many factors, chiefly the slow growth in the global economy. These tensions aren't new to the oil market and we've dealt with them in the past with a solid will, with wisdom and experience, and we will deal with the current developments in the oil markets in the same way."
King Salman is already signaling that Saudi oil policy will not change, yet some critics of Saudi oil policy such as Price Alwaleed are hoping for a change. The big question is whether or not the new king wants to keep Ali Al-Naimi as Saudi oil minister. There is a possibility that Ali al-Naimi could be replaced as oil minister especially because Mr. Naimi has been dropping hints about backing out of the role full time.
There is also a possibility tensions in the Middle East will intensify as terrorist and insurgents may look at this as an opportunity to cause more unrest. The King has done a good job in fighting insurgents in Saudi Arabia and has joined the war on Isis. He did not get along with the Obama administration and criticized the President for his push towards democracy in Egypt, which he said was a mistake.