Saudi Arabia: a succession battle could develop sooner than expected

There Could Be A Power Vacuum 

In Saudi Arabia 

 And It Would Be

 'Profoundly Dangerous'

BY ELENA HOLODNY

There have been reports about King Abdullah of Saudi Arabia's poor health and hospitalizations — and that's got everyone worried about what that means for the oil market and OPEC.

"For now, the greatest immediate risks to the region and markets from this issue are if (a) Abdullah were to become incapacitated or die, and (b) Crown Price Salman simply isn't capable of ruling," writes Bill O'Grady. "Since it isn't clear that Prince Muqrin would take power, a succession battle could develop sooner than expected."

"Given the challenges Saudi Arabia faces, from dwindling American power in the region to a stronger Iran and the breakdown of nation states in the area, a power vacuum in Saudi Arabia would be profoundly dangerous. If conditions deteriorate, it would likely end the current bear market in oil and lead to higher overall inflation in the developed world," writes O'Grady.

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Read more: www.businessinsider.com

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Saudi Succession

by Bill O'Grady

On New Year’s Eve, King Abdullah of Saudi Arabia was hospitalized with pneumonia. According to reports, he is taking visitors and will probably survive this illness. On the other hand, the king is at least 90 years old and is becoming increasingly frail.

In light of his advanced age and declining health, an analysis of royal succession in Saudi Arabia is in order. This process is becoming increasingly uncertain. Unlike many European royal families, Saudi successions are not based on primogeniture; instead of passing from the king to his eldest son, it passes to a brother. Due to the advancing age of the second generation of princes, this process is becoming increasingly problematic.

We will begin this report with a history of Saudi kings. Following this history is an examination of the current Saudi succession, focusing on the Crown Prince and who remains as potential kings among the “second generation” of the Saudi Royal Family. In this context, we will analyze the challenges facing the kingdom and how the succession issue will likely complicate the manner in which these issues are resolved. As always, we will conclude with potential market ramifications.

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Read more: www.advisorperspectives.com