Saudi Arabia's 91-year-old King Abdullah bin Abdulaziz has died, according to Saudi media outlets.
He was admitted to the hospital in Riyadh for "medical checks" at the end of December.
Crown Prince Salman has been named the new king.
King Abdullah assumed the throne in 2005 as the country's sixth king. Salman, 79, is Abdullah's half-brother and has been making appearances and speeches on behalf of the late king for the last couple of months.
Salman is also reportedly in poor health, so from here the family's succession could get interesting. According to Reuters, "King Salman has called on the family's Allegiance Council to pay allegiance to Muqrin as his crown prince and heir."
Muqrin bin Abdulaziz is Abdullah's half-brother and is 69 years old. He was controversially named deputy heir to Abdullah last March, effectively bypassing two of the late king's other half brothers. The move went against the unspoken rule that succession passes down according to age.
The Saudi succession question brings up real questions about the country's oil policy.
Saudi Arabia is the most powerful member of the OPEC oil cartel. It has, so far, refused to cut oil production to stop prices from falling further, preferring to let the market run its course. But that could change at any time, and may very well if there is a transition period related to succession soon.
Emad Mostaque at the emerging markets consultancy Ecstrat outlines the basic issue:
Oil prices are now at levels that cause real concern on the streets of Saudi Arabia, with the prospect of succession the icing on top that has caused retail investors to take the market down another leg.
This policy may not make it through a succession period, where public support and good will is essential, particularly as it has nearly been 20 years since the last change.
The new regent could decide to keep existing policy, change it completely or anything he decides. Similarly he has free reign to realign Saudi Arabia’s foreign policy as he wishes, which is a discussion for another time and place, but could have significant regional impacts.
Michael Levi, a global energy expert at the Council on Foreign Relations, said in an interview earlier this month with Business Insider that succession may not have a big effect on policy, but could lead to a lot of political turmoil. "Either very little happens or a lot does," he said.
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