Markets Enter a "New Era" as Saudi Arabia Ends Reign of the Most Powerful Man in Oil

Ali bin Ibrahim Al-Naimi was known as the most powerful man in oil

Bunker buyers should expect a bumpy week ahead; Ali bin Ibrahim Al-Naimi, Saudi Arabia's oil minister for over 20 years, on Saturday was removed from his position by a royal decree and replaced by Khalid al-Falih, chairman of Saudi Aramco and Minister of Ministry of Energy, Industry and Mineral Resources.

The move has been widely viewed by analysts as a signal that the markets are entering a "new era."

The de-facto leader of the Organization of the Petroleum Exporting Countries (OPEC), Al-Naimi was not only known as the most powerful man in oil but also as the "maestro of the oil markets," whose comments could send markets surging in either direction.

He was also insistent that Saudi Arabia protect its market share in the face of new competition from the likes of US shale oil, a policy that has lead to chronically low prices since their collapse at the end of 2014.

His exit is seen as a signal that the Kingdom could now be willing to let market forces dictate the cost of crude.

"What that means is you'll have much more market volatility. You'll have higher highs and lower lows if you don't manage [crude prices]," Pira Energy Group's Gary Ross told CNBC, who described Al-Naimi as a "stabilizing force" for the markets that could very well react negatively to his absence.

However others have been quick to link comments made by al-Falih in a statement on Sunday as a signal that record Saudi output will continue.

"Saudi Arabia will maintain its stable petroleum policies. We remain committed to maintaining our role in international energy markets and strengthening our position as the world's most reliable supplier of energy," he said.

Meanwhile, Helima Croft, managing director at RBC Capital Markets, said that "after the Doha debacle the writing was on the wall for Naimi," referring to last month's failed talks in Qatar aimed at reaching agreement over an oil output freeze.

As Ship & Bunker reported at the time, Al-Naimi was willing to do a deal, only for Deputy Crown Prince Mohammed bin Salman of Saudi Arabia - a rising force in the Kingdom - to say no such freeze would happen without Iran's participation.

For it's part, as far back as February Iran had dismissed as "ridiculous" the notion that it should participate in the freeze while it was bringing production levels back up from pre-sanction levels.