Newly named Crown Prince Mohammad bin Salman of the country Saudi Arabia is unlikely to make changes to the oil production policy, but his more aggressive foreign policy could at some point put a political risk premium back in the price of oil, according to RBC’s Helima Croft.
On Wednesday King Salman named his son to be his successor who is only 31-years-old. King replaced his nephew Mohammad bin Nayef who was exposed to all his posts. A high-profile role in managing the entire kingdom is captured by bin Salman and he has the mission to transform the economy. While bin Nayef fell into a diminished role.
The visit of bin Salman earlier this year make a way for the United States President Donald Trump trip to the Saudi Arabia.
The global head of commodities strategy at RBC Ms. Croft said: “The rise of MBS will also likely mean even more hawkish foreign policy moves from Saudi Arabia and more intensified efforts to confront Iran,”. She also noted that the prince, known as MBS, launched what he has turned out to be a costly war in Yemen and headed up the surprise blockade of Qatar”.
Prince bin Salman is also fronting Vision 2030, he plans to diversify the economy away from its dependency on oil, and there must be a new motion with the change in the leadership, she noted. And the main pie of the plan is the public offering of state-owned Saudi Aramco, expected next year.
Croft said on CNBC on Wednesday that, “This is a big generational shift in Saudi Arabia. I used to talk about 70 being young for a Crown Prince in Saudi Arabia. To have 31-year old Crown Prince is a deceive break with past practice,” “To move aside Mohammad Nayef the counter-terrorism czar, the figure of the establishment, this is groundbreaking for Saudi Arabia. The question is can Mohammad bin Salman deliver on his big reform plans?”