According to foreign media reports, Saudi Arabia's 88-year-old King Salman was diagnosed with a lung infection due to fever and joint pain and will be treated with antibiotics. After the Iranian president was killed due to the “hard landing” of the helicopter, this news also became another source of uncertainty for the oil market.

King Salman took the throne in 2015 and later appointed his son Mohammed bin Salman (commonly known as “MBS”) as Crown Prince. It is widely believed that the Crown Prince is responsible for managing the day-to-day affairs of Saudi Arabia. He had planned to go to Japan on Monday for his first visit in 2019, but the Crown Prince postponed his visit due to the king's health issues.

The Japanese side said that the two countries will rearrange, but did not specify the exact time. Previously, the Saudi Crown Prince had planned to visit Japan at the end of 2022, but the trip was cancelled shortly before his scheduled arrival.

Oil Market Concerns: Will Saudi Oil Policy Change?

Saudi King Salman has said that the country's oil policy is aimed at stabilizing the global oil market and serving consumers and producers.

IG Markets analyst Tony Sycamore (Tony Sycamore) said that the Saudi king's poor health led to a further increase in uncertainty in the energy market after news broke of the Iranian president's death. He added that the WTI price may rebound further to $83.50 after rising above the 200-day moving average of $80.02. Sikamore said:

“I really think there are enough reasons for this to happen, especially considering the real estate measures announced by China last week, including lower mortgage interest rates, lower down payment ratios, and government purchases of unsold homes.”

Brent crude oil rose about 1% last week, the first recorded increase in three weeks. WTI also rose 2% due to improved economic indicators in the US and China, the world's largest oil consumers.

Warren Patterson (Warren Patterson), head of commodity strategy at ING, said, “The oil market still remains largely volatile. If there are no new catalysts, we may have to wait for the clarity of OPEC+ production policies to break through this range.” OPEC+ is scheduled to meet on June 1. Paterson said:

“The market also seems increasingly numb to geopolitical developments, probably because OPEC oil producers have a large amount of idle production capacity.”

Regarding the Saudi king's health, MST Marquee energy analyst Saul Kavonic (Saul Kavonic) said that the market and industry have become accustomed to the MBS Crown Prince's leading position in the energy sector, so “the Saudi strategy will remain continuous regardless of (the king's) health issues.”

Cooperation between Saudi Arabia and Japan

According to the Japanese government, the Saudi Crown Prince originally planned to meet Prime Minister Fumio Kishida during his visit. According to Japanese media reports, the Saudi Crown Prince also plans to meet with Japanese companies and sign an agreement to strengthen the liquid hydrogen supply chain.

Japan and Saudi Arabia have been deepening ties in recent years. Prime Minister Fumio Kishida visited the country in July and announced the launch of a green energy project initiative, including hydrogen and ammonia. He also urged the Crown Prince to increase investment in semiconductors and batteries.

Technology has recently become an emerging field of cooperation between the two sides, and Saudi wealth funds are the largest shareholders of Japanese gaming giant Nintendo. Saudi Arabia's new investment company Alat is also collaborating with SoftBank Group to build a fully automated manufacturing and engineering center to build industrial robots in Riyadh.

The two countries held high-level formal meetings in December last year, including a meeting between Japanese Trade Minister Ken Saito (Ken Saito) and Saudi officials at the same level to make progress on the “Saudi-Japan Vision 2030” agreement, which aims to promote investment between the two countries. The partnership is part of a broader “Vision 2030” agenda, where the Saudi Crown Prince plans to transform the Saudi economy by investing trillions of dollars in various sectors such as tourism, electric vehicles, and semiconductors.