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Saudi Arabia's oil minister is out in a major shake-up

Khalid al-Falih. Photo: Anadolu Agency / Contributor/Getty Images

Saudi Arabia has jettisoned Energy Minister Khalid al-Falih in a major shake-up of energy leadership in OPEC's most powerful crude oil producer.

Driving the news: Saudi state media announced that he's being replaced with Prince Abdulaziz bin Salman. He's Crown Prince Mohammed bin Salman's half-brother, according to Bloomberg.

Why it matters: The move comes as the kingdom is grappling with the rise of U.S. production and other forces that have held down the price of oil, the country's dominant revenue source.

  • It also comes amid revived preparations for the IPO of state oil giant Aramco.
  • The royal decree replacing al-Falih arrives just days after he was removed as board chairman of Aramco.

The big picture: Al-Falih, who was appointed in 2016, has been among the most prominent figures in global oil markets. During his tenure, OPEC began a joint production-limiting pact with Russia in an effort to tighten up global markets — an ongoing agreement that has had mixed results.

  • Per the Financial Times ($), "Abdulaziz, the new energy minister, joined the oil ministry in the 1980s and served in several positions including deputy minister and most recently as minister of state for energy affairs, a position he held since 2017."

Go deeper: Saudi Aramco replaces chairman as oil giant prepares for massive IPO