LONDON/SINGAPORE (Reuters) – Saudi Arabian Oil Minister Ali al-Naimi helped to calm a record price rally, halt a record crash and restore OPEC’s damaged credibility.
Repeated rumors the 75-year-old minister plans to retire from the top of the world’s most powerful oil ministry have so far proved unfounded.
One of the leading oil exporter’s highest ranking non-royals, the technocrat commands respect for his market savvy and deft handling of OPEC politics, notably between Riyadh and Tehran, the group’s second biggest producer.
For the OPEC press corps, which has pursued Naimi around luxurious hotel lobbies across the world, an interview with him is the ultimate scoop and every syllable he utters to the unruly scrum is instantly flashed on to the wires.
“Naimi is doing a superb job. Everyone in the kingdom has the highest regard for him,” said Sadad al-Husseini, a former top official at Saudi state oil giant Saudi Aramco.
“When your horse is winning you don’t get off your horse.”
Naimi was promoted to the top oil job in 1995 after spending nearly half a century making his way through the ranks.
He had joined Saudi Aramco at the age of 12 as an office boy, was sponsored by the company to take a master’s degree at the prestigious Stanford University in the United States, and eventually became CEO.
“When I started I was moving paper from one office to another. Now, I’m still moving paper from one office to another,” Naimi told journalists early this year at a meeting of the Organization of the Petroleum Exporting Countries in Vienna.
Those who work with him admire him for having started at the bottom and for his deep understanding of the oil business.
“He’s a smart man and knows the market inside out. The market can never bluff Naimi,” one of his secretaries told Reuters.
“He worked his way up and that’s what earns him the most respect among all of us. Power wasn’t just handed out to him, he worked hard for it.”
Naimi demonstrates his discipline in vigorous early morning exercise.
Journalists used to accompany Naimi on a run before breakfast around the Ring, the circular road around Vienna. Now, it is more of a speed-walk, although some reporters still struggle to keep pace.
As they panted behind him, Naimi once asked those in the accompanying pack if they had seen the film 12 Angry Men in which one juror convinces the others a defendant is not guilty. His point was that of the 12 OPEC members, he had the tenacity to convince the others of his reason.
Analysts across the energy sector agree he has often been right.
“He is the most consummate and professional oil minister,” said Lawrence Eagles of JP Morgan.
“The hardest thing is for Saudi Arabia to find a successor.”
ENGINEERED PRICE RECOVERY
Naimi faced one of the biggest challenges of his career when the oil price crashed to the low 30s in December 2008 from a record rally to nearly $150 a barrel in July the same year.
In response, Naimi led OPEC as it implemented its biggest ever supply cut and ensured it was followed by unprecedented discipline from a group famous for latitude in implementing output curbs.
Compliance with the targets has since lapsed, but only after the market recovered to levels widely viewed as comfortable for both producers and consumers.
The speed of recovery from the most recent crash is in sharp contrast to the crisis of the late 1990s when OPEC, under the de facto leadership of a then less experienced Naimi, agreed to a supply increase as Asia went into economic collapse.
After the oil price dropped to single digits, Naimi steered aggressive supply cuts and sought the cooperation of non-OPEC oil producers, albeit with limited success.
While Saudi Arabia does not want oil to be too cheap, its need to retain long-term customers for its massive oil reserves means it is also nervous about price spikes that can destroy demand.
It has repeatedly said it will supply the market what it needs and during the record rally of 2008 promised at specially convened talks in Jeddah, Saudi Arabia, to pump extra oil provided there was customer demand.
Another long-held policy is that the upstream is sacrosanct, and as its gate-keeper, Naimi has fended off aggressive overtures from the world’s oil majors.
But he has brought international companies into the downstream to help develop refinery projects designed to supply the large Asian market, where oil demand is expected to soar long after the developed world has curbed its use.
Naimi has also looked beyond oil to a more diverse energy future.
Last year, he took part in the inauguration of the King Abdullah University of Science and Technology.
One of the ambitions of this project to modernize the education system is to position itself as a leading solar energy research center.
Some observers viewed this as a final crowning project and that the father of four, married for nearly 50 years might be about to begin his retirement. They were wrong.