Who Speaks For Saudi Arabia On Oil, Rivals And Allies Wonder

Reuters

MOSCOW/DOHA, April 19 (Reuters) - As far as Venezuelan oil minister Eulogio Del Pino is concerned, his counterpart Ali al-Naimi, the world's most influential oil official for the past two decades, is no longer the voice of authority for Saudi Arabia.

Del Pino is still trying to find who is.

As prospects for the first deal between OPEC and non-OPEC in 15 years faded on Sunday due to last-minute demands from Saudi Arabia, ministers gathered in Qatar appealed to Naimi to save the agreement, Del Pino said.

"Unfortunately, the people representing the Saudis at the meeting didn't have any authority at all," Del Pino told reporters in Moscow on Monday, a day after Saudi Arabia's demand that arch-rival Iran sign on ruined a widely expected agreement to freeze output.

"Even Naimi didn't have the authority to change anything. The Saudis said, 'we have new papers and either you approve them or we don't agree'," Del Pino said. "It was a purely political decision... Oman, Iraq, everyone was disappointed and one minister told me it was his worst-ever meeting."

OPEC member Venezuela, one of the hardest hit by the latest oil price collapse, has had a tense relationship with the cartel's de facto leader Riyadh for decades.

But Del Pino's frustration is being echoed inside and outside the Organization of the Petroleum Exporting Countries since Deputy Crown Prince Mohammed bin Salman became the kingdom's top oil official last year.

Few Saudi or OPEC watchers have doubts that the 31-year-old Prince Mohammed is ultimately in charge of oil policy at the world's largest oil exporter. He is also in charge of defence and economic reform.

But after decades of hearing mostly one technocrat reliably articulate that policy to the outside world -- Naimi -- a proliferation of voices is causing more confusion than clarity, they say.

Besides Prince Mohammed, the second in line to the throne, those voices also include Naimi's deputy and an older half-brother of the deputy crown prince, Prince Abdulaziz, as well as state oil giant Saudi Aramco's chairman Khalid al-Falih.

Added to those is the persistent presence of Naimi himself, despite rumours that the 81-year-old would soon be allowed to retire.

U-Turn

Saudi policies have never been easy to read, but the unpredictability has risen steeply in recent months, Saudi watchers said. That is particularly unwelcome given the worsening relations between Riyadh and Tehran, which are fighting proxy wars in Syria and Yemen.

Gulf OPEC sources said that although the Saudis' Gulf allies quickly came into line behind Naimi during the meeting on Sunday, his decision came as a complete surprise to them. The kingdom usually consults with Kuwait, the UAE and Qatar.

A senior source familiar with discussions said he thought Naimi himself was not aware of the change in plan until late in the game.

"I think it was a last-minute decision, otherwise Naimi would not have come," the source said. "Naimi flew to Doha with an intention to close a deal and when he arrived in Doha, he got another instruction not to do it."

Up until Saturday, Prince Abdulaziz was assuring everyone privately that there would be a deal, sources close to the discussions said.

Qatari officials were also telling participants that the Emir of Qatar, Sheikh Tamim bin Hamad al-Thani, had clinched Prince Mohammed's agreement that there would be a deal no matter whether Iran took part or not, the sources said.

For Russia, which also meant to join the global freeze deal, the change in the Saudi position was a huge surprise because the Kremlin had thought it had cut the deal with almost everyone who matters in Saudi Arabia, Russian sources said.

Russian oil minister Alexander Novak was so confident in the deal's success on Sunday that he was the last minister to arrive, having spent most of Saturday playing for the Russian government's soccer team against Italy.

"At the end of the day it didn't really matter who we were speaking to, Naimi or Prince Mohammed. The Saudis just changed the policy," said a source close to Novak, who was at the Doha talks.

"Of course, we will continue talking to the Saudis. But it is so difficult," the source said.

(Writing by Dmitry Zhdannikov; Editing by Sonya Hepinstall)

Copyright 2016 Thomson Reuters. Click for Restrictions.

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