More Saudi policy U-turns will worry foreign partners

Significance

Both moves reflect the determination of de facto ruler Crown Prince Mohammed bin Salman to assert his strength. Internally, he renewed his dominance of the ruling family, against (apparently unfounded) rumours that senior princes with strong links to the interior ministry were mobilising against him. Externally, Riyadh looks to regain market share from OPEC+ defectors, as well as US shale.

Impacts

• New fiscal constraints from lower oil prices and growing investor uncertainty will undermine economic goals.
• In the longer term, the crown prince may have to rely upon repressive measures to assuage youth dissatisfaction over failed promises.
• Efforts to re-orient Riyadh’s image by appointing new Western-friendly ambassadors will be undermined.