Saudis Must Now Temper Expectations for Aramco's IPO

The Saudi crown prince, Mohammed bin Salman, known as MBS, used oil as his initial springboard from relative obscurity. In his first on-the-record interview, in January 2016, he proposed the initial public offering of the oil giant Saudi Aramco. Also that year, he stamped his authority on the energy and industrial sector by appointing his loyal associate Khalid al-Falih as oil minister, with a broad portfolio. Now, as he pursues a remarkable purge of princes and other senior figures on corruption charges, oil is once again driving his vision.

Yet, the crackdown carries some risk: Even if the Aramco IPO goes ahead and investors look past the political upheaval, it will raise less than the hoped-for $100 billion and more like $65 billion. A plan to reduce oil dependence in the long-term has created a greater need for petrodollars in the short-term, even as Saudi Arabia becomes more hawkish about oil prices.