By Gulgiz Muradova
Oil traders have faced a new risk factor amid the developments in Saudi Arabia, the world’s second-largest crude producer and the biggest crude exporter.
The oil market, for a balance on which Saudi Arabia made huge efforts, is likely to be affected by the arrest of dozens of former state officials and at least 11 Saudi princes in an anti-corruption drive in Saudi Arabia, experts say.
On Sunday, 11 Saudi princes, four incumbent ministers of the Saudi government and dozens of former government ministers had reportedly been arrested in an anti-corruption operation.
The arrests took place after Saudi ruler King Salman decreed the creation of a powerful new anticorruption committee led by his son and heir, Crown Prince Mohammed bin Salman.
As the unexpected crackdown spread panic through the Saudi establishment, Gal Luft, the co-director of the Washington-based Institute for the Analysis of Global Security, expects the game of thrones to be fierce.
“This is only first act of what could be a period of turmoil in the Kingdom’s leadership and the implications for the oil market will soon be felt,” Luft told Trend.
Luft believes that traders will be taken aback by the new uncertainty as it demonstrates that no businessman in the Kingdom is untouchable.
“This may have impact on investment decisions and can lead to protracted period of price volatility,” he noted.
In late October, the price of the industry standard Brent crude moved above $60 per barrel for the first time in more than two years.
On Nov.3, the price increased to $62.07, recouping a loss earlier in the week to finish 2.7% higher than the previous week. On Saturday, Russia, Saudi Arabia, Uzbekistan and Kazakhstan voiced readiness to do more work to reduce global oil inventories after a three-year market downturn.
Saudi Arabian oil minister Khalid Al-Falih said on Saturday that more work was needed to reduce global oil inventories.
OPEC, Russia and other oil producers are due to meet at the end of November in Vienna to decide whether to extend the current supply-cut pact.