A major obstacle holding back economic reform in Saudi Arabia has been removed. And with it goes one of the main barriers to a rising oil price.
Saudi's cabinet approved an economic reform plan on April 25 aimed at ending the country's addiction to crude. The plan's author, Deputy Crown Prince Mohammed bin Salman, could plausibly argue that after the price of oil had fallen 60 percent in two years, it was time to radically overhaul the economy and open up new sources of non-oil income. Now that his strategy has won official backing, the 31-year-old prince has a chance to get the best of both worlds by moving ahead with reforms while letting oil prices - which Saudi effectively drives as the swing producer - climb at the same time.