Another day, another Gulf succession question mark . However, instead of an ailing Oman Sultan, the news is quite more serious as the world learned that Saudi Arabian King Abdullah bin Abdulaziz passed away early Friday morning at 1:00 am . He was 90 years old and was born before Saudi Arabia was even an official country.
The news is not surprising, as the late King has been hospitalized since December 31 at a hospital in Riyadh . He had been suffering from a lung infection. However, it is a historic and sad event for the Gulf country and will be marked by a few days of mourning in Saudi Arabia.
There is much speculation as to how this news will affect the future of KSA, the world's biggest oil exporter and producer, and home to the two holiest sites in Islam, Mecca and Medina.
Following the news of the late King's death, oil climbed, with futures rallying as much at 3%. U.S. crude prices rose 1.5% immediately following the news.
In addition to being the world's biggest oil exporter and producer, KSA recently led an OPEC decision to maintain its oil production levels, despite the glut on the market thanks to a shale boom in the United States. An oil expert tells Bloomberg :
“The passing of King Abdullah is going to increase uncertainty and increase volatility in oil prices in the near term,” Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein & Co., said by phone. “I wouldn’t expect a change in policy in the near term to be known, but the passing comes at a challenging time for Saudi Arabia.”
However, the royal family moved quickly to show a united front, announcing the news and addressing the succession issues in a televised statement by now-King Salman, who is 79. He appointed Muqrin as his official crown prince and heir, saying in a statement that: "His Highness Salman bin Abdulaziz al-Saud and all members of the family and the nation mourn the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz, who passed away at exactly 01:00 this morning."