Saudi Arabia’s decision to shelve plans to list state oil company Saudi Aramco is more of a shock than a surprise. Despite protestations from Riyadh that it is postponing rather than abandoning the initial public offering, it seems clear King Salman has overruled Mohammed bin Salman, his headstrong young heir. The planned sale of 5% of the Saudi oil company was billed as the biggest IPO ever. It was the linchpin of MbS’s ambitious Vision 2030 programme to turn Saudi Arabia from an oil-dependent rentier state into a private investment-driven economy of entrepreneurs and innovators. There can be no question that the collapse of the IPO plan is a blow to his prestige. But that was partly self-inflicted. It was the crown prince who insisted that Saudi Aramco is worth $2-trillion, seen by many analysts as an outlandish valuation. Other hurdles were also high: the increased scrutiny and disclosure requirements that would come with a public listing; a rigorous audit of the oil and gas rese...

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