Saudi Arabia has replaced its longtime oil minister as part of a larger ongoing government shakeup, as the the king’s son Deputy Crown Prince Mohammed bin Salman unveils wide-ranging reforms aimed at overhauling the Saudi economy after lower oil prices eroded state revenues.
A royal decree said that Ali al-Naimi, oil minister since 1995, has been replaced by former Health Minister and Saudi Aramco board chairman Khaled al-Falih. Before he became the oil minister, al-Naimi was the president of Aramco.
Lower oil prices since mid-2014 pushed Saudi Arabia’s budget deficit to nearly of $100 billion last year and a projected deficit this year of $87 billion. Oil accounted for more than 70 percent of the state’s revenue in 2015.
Last month, Mohammed bin Salman announced a plan to publicly list less than five percent of Aramco to create a massive sovereign wealth fund to develop its cities.
Aramco produces some 10 million barrels of crude a day, giving it outsized influence over world energy markets. The deputy crown prince put the estimated value of Aramco at more than $2 trillion.
In addition to having served as health minister, al-Falih had previously been the CEO of Aramco from 2009 until his appointment as board chairman in May 2015.