In a surprise cabinet reshuffle, Ali al Naimi has been replaced by Khalid al-Falih, current chairman of Saudi Aramco as Saudi Arabia's oil minister.
For close to two decades, Ali al Naimi was the most important person in the world of oil. After acting as CEO of Saudi Aramco, he was appointed to the post of Saudi oil minister in 1995, and during his tenure has enjoyed the power to determine the price of oil with a single word.
Oil prices have been plunging over the past two years since Saudi Arabia broke off from the rest of the petroleum cartel to pursue its intention of putting US shale and high cost OPEC production out of business. 80-year old Al Naimi’s dismissal came as the world's largest oil producer continues to contend with the fallout from the global bear market in crude oil.
Iran Crashed Freeze Proposal
Ali al-Naimi‘s power has been fading for some time and his last few decisions have not been successful. 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. Last month, at the meeting of OPEC and non-OPEC ministers in Doha, he compromised with an agreement to freeze production if Iran agreed to do so as well. Iran said no and al-Naimi's deal fell through.
Khalid al-Falih, the new oil minister, is well known in the world of oil and he is confident that the Kingdom is sufficiently prepared to fight for Saudi’s market share.
According to al-Falih "If prices continue to be low we will be able to withstand it for a long, long time. Obviously we don't hope for that, but we're prepared for it."