All Eyes on Saudi Arabia
While Americans were dawdling over mimosas at Mother's Day brunches yesterday, the Saudis were doing business, all kinds of business: There was a spot of foreign worker torture (nothing to see here), a bit of sniping at Iran, but mostly big government reshufflings.
The weekend's Number One Big Saudi Event was the ease-out of 80-year-old oil minister Ali al-Naimi. After nearly 21-years at the post and, by his own description, seven decades around the oil industry, he could move the market with a single cryptic remark.
Al-Naimi's departure is further evidence that 30-year-old prince Mohammed bin-Salman, now Saudi Arabia's de facto CEO, is not wasting any time with his plans to diversify the Saudi economy. Naimi is being replaced by Khalid Al-Falih, born in 1960. who has been serving, and will continue to serve, as the chairman of Aramco, the state-owned oil company. So far he appears to be about "business as usual." but, of course, that's just coming into focus.
And there are big changes to the oil ministry as well. Al-Falih will head a a revamped "mega ministry," as Business Insider puts it, one with responsibility for oil and gas extraction, power generation and distribution, and mining and industrial development, while continuing to run Aramco and its long-rumored IPO.
That IPO brings us to Big Saudi Announcement Number Two: The Saudis said over the weekend that Aramco will be listed in New York, London and Hong Kong. Which country takes the bait will be fascinating not just because of the numbers involved (Aramco is said to be worth $2.5 trillion ) but also because of weighty political alliances down the road.
The Saudis are now feeling quite friendly to Britain whose capital city just elected its first Muslim mayor. About the USA, with a major presidential candidate who's called for mass Muslim deportations and a government which may investigate a Saudi/9-11 tie, not so much. Investing could be a way to heal rifts and/or solidify ties.
In short, there may be plenty of buzz about renewables but with $2.5 trillion IPOs floating around (even if the $2.5 trillion number is not quite accurate), oil still greases the world's engine.