Saudi Arabia: fissures within

King Salman

The lack of agreement between members at the 168^th OPEC meeting on 4^th December means that Saudi Arabia can continue to pursue its strategy of maintaining market share over price for a little longer. In fact, recent production figures show that Saudi Arabia is pumping record amounts of crude this year, a sign of its commitment to this strategy.

However, with oil prices reaching recent lows of c.USD40/bbl and little sign of a recovery anytime soon, questions are being raised on whether this was the right strategy to pursue. The country’s 2015 budget was based on an oil price of USD90/bbl, but with the ongoing war in Yemen and King Salman handing out money to stave off public discontent, the fiscal breakeven oil price is now approaching USD110/bbl, almost triple of where Brent is currently hovering.

Members of the royal family have begun questioning King Salman and his son, Prince Mohammad bin Salman’s, ability to run the kingdom, culminating with letters written by an anonymous Saudi prince calling for a coup against the King – these letters were published in The Guardian newspaper in September 2015. The letters assert that King Salman and his son are pursuing dangerous policies that will lead to the kingdom’s ruin. Apparently the call for the change in leadership has widespread support from within the royal family and wider Saudi society, although few will publicly acknowledge this given the history of harsh crackdowns on any dissenters.

Aside from scepticism over oil policy, the Saudi intervention in the Yemeni conflict has also become a serious source of unease inside and outside the palace walls. Prince Mohammed bin Salman, who is in his early 30s, and has been educated domestically with limited military training is viewed as lacking the necessary experience in running the country’s defences. His unofficial nickname, “Reckless”, reflects an increasingly held view that he rushed into Yemen without a well thought-out strategy and the war is now consuming a significant part of Saudi’s budget with no end to the conflict in sight.