Saudi King Abdullah bin Abdulaziz al-Saud in June. Reuters 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.

Oil Policy

The death of Abdullah 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.

Generational Succession Crisis

Saudi Arabia's new king, Salman bin Abdul Aziz al-Saud. REUTERS/Adnan Abidi Longer term, the dynastic issue could become a problem.

The choice of Muqrin, a British-educated fighter pilot who has close ties to the US, is controversial partly because he is the son of a Yemeni concubine who was never formally married to his father, King Abdulaziz Al-Saud, who founded the Saudi state in 1932.

“He is not a real prince; his mother was a slave and there are other brothers who are more competent,” a former Saudi official told Liz Sly of the Washington Post last year. “Nobody believes Muqrin can become king.”

Sly explained the problem that consequently arises when the next generation takes over:

Given that there are scores of princes in [the third generation], the potential for discord is high. Whoever inherits the throne is likely to anoint his own brothers as future heirs, thereby cutting out multiple cousins from access to the throne and the patronage it provides.

Over at Reuters, Mohamad Bazzi, the former Middle East bureau chief at Newsday, explains the problem with appointing a successor in the third generation, which has as many as 30 princes in line for the throne:

Muqrin does not have strong enough support within the royal family to appoint one of his sons to the post. One theory is that Abdullah positioned Muqrin as second-in-line so that he would be beholden to Abdullah’s sons, one of whom could become king once the generational shift takes place.

And here's Rick Gladstone of The New York Times:



Placing Crown Prince Salman and Prince Muqrin in line to succeed Abdullah effectively delays the time of reckoning when the next generation of princes, the founder’s grandsons, will be moved into positions of high authority."

Here's what the succession chart looked like before the death of Abdullah: