Saudi King Abdullah bin Abdulaziz Al Saud Dies

Saudi Arabian King Abdullah bin Abdulaziz Al Saud has passed away at the age of 90. The state owned television just reported this news a little while ago. Crown Prince Salman bin Abdulaziz will succeed him on the thrown of the world’s biggest exporter of oil.

King Salman has already started appointed people to positions. His half-brother Muqrin is now the crown prince. By doing this, he avoids speculation as to heir and royal succession.

King Abdullah took power in 2005 after his brother King Fahd died of pneumonia. US President Barack Obama has already expressed his condolences to the family and stated he is fully committed to US – Saudi ties. “As a leader, he was always candid and had the courage of his convictions,” Obama said. “One of those convictions was his steadfast and passionate belief in the importance of the U.S.-Saudi relationship as a force for stability and security in the Middle East and beyond.”

Smooth Succession Anticipated

Analysts, including myself, expect the succession by King Salman to be smooth as the Saudi royal family announced back in March he would take power. However, we could see some implications in the oil markets. We already saw crude oil prices jump after the announcement as US WTI rose two percent to $47.76. Brent Crude also jumped higher to $49.80 a barrel, at the time of this report. The problem comes from the region and not from Saudi Arabia as the price of oil is now below the key technical level of $50 a barrel.

Saudi Arabia led the decision by OPEC to keep output the same in November. This triggered the collapse in crude prices. The price of crude has lost over 50 percent of its value since mid 2014.

Several weeks ago, the Saudi King was admitted to the hospital and reported to be seriously ill. Analysts at that time, were pretty much on the same page that the country’s policy’s on geopolitics, oil and domestic issues would remain the same under Salman’s reign. Salman is well liked by the region and has already been performing many duties, such as prime minister and minister of defense.

King Abdullah pushed social changes in the country including increased rights for women and economic deregulation. He also played a big role, supporting Egypt after the military intervened in 2012. Abdullah also supported the rebellion in Syria against President Bashar al- Assad, However, he made no moves to make the country more of a democracy. At stake now, under Salman is the direction with the United States which has become the biggest ally of Sunni Islam. The US has played a big role in the region after the Arab Spring.