The dismissal of Saudi Arabia's long-serving and influential oil minister ushered in a new wave of uncertainty for oil prices, which have rallied lately but could change course depending on the kingdom's policies.
To some, the removal of Ali al-Naimi after 20 years as oil minister cemented the grip of 31-year-old Deputy Crown Prince Mohammed bin Salman on Saudi Arabia's energy policy. Some OPEC officials said that could mean a deeper politicization of oil-production strategy as the kingdom looks to neutralize its rival Iran, which is trying to come back from years of Western sanctions with a surge of output.
U.S. oil prices have surged 70% since hitting a 13-year low in February as traders wagered that the global oversupply of crude is set to shrink. But throughout the climb, Saudi Arabia's next steps have remained an outstanding question.
Large oil-producing nations, including Saudi Arabia, last month failed to agree on a deal to freeze output, and some analysts have said these countries could ramp up production further as they compete for market share.
Saudi Arabia had appeared willing to make an output-freeze deal in Doha, Qatar, where the meeting was held, but then changed its stance. If Mr. Naimi were inclined to curb production, but others above him weren't, his departure could mean increased output, some said over the weekend, referring in particular to Prince Mohammed, who has indicated the country could ramp up production.
"Mohammed bin Salman has changed everything," said Helima Croft, head of commodities strategy at RBC Capital Markets. "He doesn't feel the economic burden to have to cooperate with OPEC," referring to the Organization of the Petroleum Exporting Countries.
Khalid al-Falih, Mr. Naimi's successor, is a long-serving Saudi oil man but he doesn't have the same experience dealing with the fractured politics of OPEC, the 13-nation cartel that controls a third of the world's oil.
Ahead of OPEC's next meeting on June 2, Mr. Falih will have to navigate a landscape that includes increased competition from Iran, Saudi Arabia's main rival for power in the Middle East. Freed from Western sanctions, Iran has embarked on a campaign to grab back customers it lost to Saudi Arabia and others in crude-oil markets and petroleum products like chemicals.
"Our main competitor in OPEC is Saudi Arabia," Amir Hossein Zamaninia, Iran's deputy oil minister for international affairs, said in an interview Sunday in Tehran.
"In the Southern Persian Gulf, oil is becoming a political commodity, more than an economic commodity," he said, though he lamented that shift. "OPEC is in a difficult situation."
In his first remarks as minister, Mr. Falih on Sunday said in a news release that the country would "remain committed to maintaining our role in international energy markets and strengthening our position as the world's most reliable supplier of energy."
Another issue for markets is Saudi Arabia's continued quest for market share. Its grip on Chinese, Japanese and Indian markets has slipped recently amid stiffening competition from countries such as Russia and Iran.
For example, while China's oil imports grew 13.4% year over year to 7.3 million barrels a day in the first quarter of 2016, its imports from Saudi Arabia grew just 7.3%, customs data show. The kingdom's share of Chinese imports fell to 15% from 15.9%.
Those competitive forces, intensified by the nearly two-year slump in oil prices, underscore the challenges Mr. Falih and Saudi Arabia face.
The potential for Saudi Arabia to increase its oil production in the coming months is "definitely a concern" for the oil market, said Michael Cohen, head of energy markets research at Barclays PLC, on Saturday.
Others saw the news of Mr. Naimi's departure as positive for prices. "I think this is going to be interpreted as being bullish for the oil prices," said Dominick Chirichella, analyst at the Energy Management Institute. The change in leadership "allows them to backtrack on the market share strategy without really losing a whole lot of face."
"The market will take it as a bullish sign but it adds unpredictability as to what the Saudis' course of action will be," said Doug King, chief investment officer at RCMA Asset Management. Mr. King manages that firm's $ 240 million Merchant Commodity hedge fund.
OPEC decided in November 2014 not to cut its production to lead oil prices higher. That decision, led by Saudi Arabia, was a departure from the group's past policies and sent prices to multiyear lows. Analysts said Saudi Arabia was expecting low prices to force high-cost oil production, including from U.S. shale deposits, out of the market.
Since then, companies have slashed spending on new drilling. Many investors and analysts expect the global glut of crude to disappear by the end of this year or early next year.
Meanwhile, recent reports that Saudi Arabia had sold a spot cargo of oil to Asia spooked traders, as it was a departure from the country's usual strategy of selling oil using long-term contracts. If Saudi Arabia is willing to sell oil on the spot market, that would make it easier for the country to increase its exports quickly, said Citigroup analysts in a note late last month.
"It looks increasingly likely that the kingdom is targeting another [500,000 barrels a day] of sales," the bank said. "This battle to secure market share appears to be the main driver of Saudi oil policy right now."
The global crude market remains oversupplied by as much as a million barrels a day, analysts say. Stockpiles of crude oil around the world stand near record highs.
Analysts have forecast that OPEC production rose in April. Official data is due to be released this week. U.S. oil prices settled Friday at $ 44.66 a barrel on the New York Mercantile Exchange, while Brent, the global benchmark, closed at $ 45.37 a barrel on ICE Futures Europe.
Mr Falih, who had been tipped by many to eventually succeed Mr Naimi, is a close adviser to the deputy crown prince in helping to redirect the kingdom's economy into a post-oil era. Still, he is unlikely to enjoy the same type of authority to set oil policy as Mr. Naimi did.
"The big, and unanticipated shift is that Mohammed bin Salman is setting the policy," said Jamie Webster, senior director of global oil markets at IHS. "However, the policy set by Naimi, to not cut in the face of structural oversupply, will likely remain."
—Dan Strumpf and Jenny Hsu in Hong Kong contributed to this article.
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