Weekly Geopolitical Report – Saudi Succession (January 20, 2015)
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.