Fitch: Saudi Arabia’s succession assists reform, adds foreign policy risk

The US-based ratings agency, Fitch ratings, is out with its report on the latest Saudi Arabia’s royal shuffle.

Key Points:

Saudi King Salman's decision to name his son Mohammed bin Salman as crown prince has reduced uncertainty about the royal succession and reduces the risk of slippage in the country's "Vision 2030" reform programme

However, the new crown prince has already made Saudi foreign policy less predictable and, in Fitch's view, his promotion could raise tensions with Iran further.

The decision to replace Mohammed bin Nayef has clarified the succession process, as there are now no obvious challengers. Tensions within the royal family could still possibly lead to changes in the succession process, but the probability is relatively low. 

The new crown prince has been the key driving force behind the Saudi-led war against the Houthis in Yemen and the boycott of Qatar.

While Fitch still sees the risk of direct outright Saudi-Iran confrontation as low, his rise, as well as the ambiguous statements from the US administration, mean that further escalation cannot be excluded.