New Energy Minister Khalid Al-Falih was longtime Saudi Aramco chief

Khalid Al-Falih, new energy minister
Updated 07 May 2016
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New Energy Minister Khalid Al-Falih was longtime Saudi Aramco chief

RIYADH: Khalid Al-Falih, named byon Saturday to head a super Ministry of Energy, Industry and Mineral Resources, was the longtime chief of state oil giant Saudi Aramco.
From 2009, he was Saudi Aramco’s president and CEO, in charge of about 60,000 employees at the firm which produces roughly one in every eight barrels of the world’s oil supply.
In May last year, Custodian of the Two Holy Mosques King Salman tapped Al-Falih to become health minister as part of an earlier government shuffle, but he also stayed on with Aramco as chairman during a dramatic global decline in oil prices which left Saudi Arabia with a record budget deficit last year.
The plunging oil revenues have accentuated a drive for economic alternatives in the world’s biggest oil exporter, which on April 25 released a wide-ranging “Vision 2030” plan aimed at transforming the economy away from its dependence on crude.
The government reorganization announced on Saturday by King Salman reflects these new priorities which include greater efficiency in state administration.
Al-Falih will head the broader Ministry of Energy, Industry and Mineral Resources as the kingdom tries to boost industry — from petrochemicals to defense — and alternative energy sources while mining is expected to take on a greater role in the economy.
Al-Falih replaces Ali Al-Naimi who headed the now defunct Ministry of Petroleum and Mineral Resources and who will become an adviser to the Royal Court.
There was no immediate word on a replacement for Al-Falih as chairman of Aramco, which is to be partly listed on the stock market as a foundation of the Vision 2030 plan.
According to an official biography, Al-Falih, earned in 1982 a mechanical engineering degree from Texas A&M University in the United States.
In 1991, he graduated with an MBA from King Fahd University of Petroleum and Minerals in his homeland.
Prior to assuming the presidency of Saudi Aramco, from 2007 he was its executive vice president of operations.


WEEKLY ENERGY RECAP: Traders keep their heads amid increased risk to tankers

Updated 8 min 30 sec ago
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WEEKLY ENERGY RECAP: Traders keep their heads amid increased risk to tankers

  • Oil seems to be steady in the $60 per barrel range for Brent even if the risks for tankers in the Arabian Gulf have gone up

RIYADH: Counterintuitively, the latest attacks on tankers in the Gulf of Oman which ratcheted up regional tensions, did not have the same effect on the oil price, which ended the week lower. 

Brent crude and WTI prices deteriorated to $62.01 and $52.51 per barrel respectively. In the past even an isolated tanker hijacking or fire was enough to send the price rocketing — but these days traders appear more fixated on where global trade winds are blowing.

Oil seems to be steady in the $60 per barrel range for Brent even if the Arabian Gulf is now considered as one of the riskiest areas for oil tankers since the Iraq War. 

It is worth remembering that the Arabian Gulf is where more than a third of the world’s hydrocarbons are transported — a fact reflected in the rising premiums for tanker insurance in the region.

Yet while insurers seem to have responded to the increased geopolitical risks, oil traders are more sanguine. A slowing global economy, persistent trade war worries and rising shale output have combined to cap price increases.

The latest monthly reports from both OPEC and the IEA also cut their demand forecasts, adding to bearish sentiment.

OPEC, in its report, cited weaker growth in global oil demand amid escalated and ongoing global trade tensions, as a key factor in the downward adjustments to the outlook for global oil demand.

  • Faisal Faeq is an energy and oil marketing adviser. He was formerly with OPEC and Saudi Aramco. Twitter:@faisalfaeq