The Washington Post: What the Royal Purge Means for Saudi Arabia and Oil

Global investors study a series of events in Saudi Arabia and how those may disrupt global oil prices. The crown prince announced a modernization drive, Vision 2030, with plans to create a new city. He also launched an anti-corruption drive, quickly followed by arrests of princes and ministers who might be seen as potential rivals. Saudi Arabia is in the process of selling a small portion of Saudi Aramco, the largest oil company in the world, on a public stock exchange. The state-owned company has a reputation for lacking transparency. Some analysts speculate that Saudi Arabia may instead sell that portion to Russia or China while others hope for economic reforms. At the same time, Saudi Arabia continues a blockade of Qatar, a fellow Gulf Cooperation Council member. Tensions with Iran are rising, too, as Saudi Arabia and Iran back opposite sides in Yemen’s civil war. Lebanon’s prime minister abruptly resigned while on a trip to Saudi Arabia. War and inequality throughout the Middle East still fuel extremism. “The International Monetary Fund said in July that the kingdom would run a deficit of about 9.3 percent of gross domestic product this year,” reports Steven Mufson for the Washington Post. “Unemployment was running around 12.3 percent.” Volatility and tensions hike oil prices, and investors wonder how much is within Saudi control. – YaleGlobal