Riyadh’s postponement of the highly anticipated Saudi Aramco IPO has the international community questioning Crown Prince Mohammed Bin Salman’s agenda and the impact that it will have on Saudi Arabia’s future.

Last month, Reuters reported that Saudi Arabia had called off its plan to list a 5% stake of state-owned energy giant, Saudi Aramco, on stock exchanges, and had also disbanded the financial advisers working on the company’s initial public offering (IPO).

For the past two years, the Aramco IPO has been marketed as a central part of Crown Prince Mohammed Bin Salman’s efforts to diversify Saudi Arabia’s economy, by raising the capital needed to invest in non-oil sectors, such as tourism, healthcare, and mining. If the Aramco IPO were to occur in the future, it would be the biggest stock flotation in history.  

Aramco’s chairman and Saudi Energy Minister, Khalid al Falih, issued a statement refuting Reuters’ report.

The Government remains committed to the IPO of Saudi Aramco at a time of its own choosing when conditions are optimum,” Falih said in a statement released by the Saudi Press Agency on August 23.

The Government remains committed to the IPO of Saudi Aramco at a time of its own choosing when conditions are optimum,”

Multiple sources told CNBC that it would be “inaccurate” to say that Aramco has canceled the highly anticipated IPO, because while the “[w]ork associated with the offering has indeed slowed down,” the IPO advisers have not been dismissed indefinitely.

Although the Saudi crown prince has put a $100 billion valuation on the 5% stake of Aramco intended for sale to the public, analysts have estimated that the IPO would only raise around $50 billion to $75 billion. The capital raised by this sale was going to be allocated to the Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, to support the kingdom’s 2030 Vision.

Doubts about the Aramco IPO have been growing for months, however, as Riyadh has continually been delaying decisions on key parts of the stock market debut, including where to list the company’s shares overseas. Skepticism about the IPO only grew earlier this year when sources familiar with the process said, “Aramco would first list on [Saudi Arabia’s] domestic exchange, the Tadawul, and put off an international listing,” according to CNBC.

One of the biggest problems that Saudi Arabia has with the Aramco IPO is that it would be required “to divulge closely guarded state secrets,” according to CNN Money. Going public would require Aramco “to lift the veil of secrecy around private information about the size of the kingdom’s oil reserves,” something that is disconcerting for the kingdom as “[k]eeping those numbers confidential has added to Saudi Arabia’s clout inside OPEC.”

“Anybody with a smartphone would have access to detailed reserve figures that are now state secrets,” said Jim Krane, an energy analyst at Rice University’s Baker Institute for Public Policy.

The postponement of both the international and domestic legs of the Aramco IPO has raised doubts about the long-term success of Saudi Arabia’s 2030 Vision.

“The problem is: the more it gets delayed and the more there’s not clarity on why it’s getting delayed and what the issues are, the more it undermines confidence,” said James Dorsey, a senior fellow at Singapore’s S. Rajaratnam School of International Studies (RSIS). Prince Mohammed has been “very good at creating expectations but not as good at managing expectations,” said Dorsey.

“very good at creating expectations but not as good at managing expectations,”

The Vision 2030 initiative, launched by the Saudi crown prince in 2016, promised to transform the kingdom’s economy and promote social openness. While Prince Mohammed has instituted several high profile reforms, such as ending the ban on women driving in the kingdom, he has also been the subject of many high profile scandals.

Saudi Arabia’s purge of allegedly corrupt royals and businessmen, its harsh crackdown on civil rights activists, the costly war it is leading in Yemen, its increasingly aggressive stance toward long-time rival Iran, and the reactionary positions taken against Canada and Germany have only served to make the kingdom’s allies and investors nervous about the future.

“The Aramco IPO was supposed to be an example of a new global level of transparency. Perhaps because there’s so much going on and so little explained, it looks like they’ve gotten worse at transparency,” a former senior Western diplomat told Reuters.

Bankers and investors say that there are other ways that the crown prince can finance the reforms needed to strengthen his country’s economy. Despite the hype, some bankers say that Riyadh’s long-term economic reforms are far bigger than the Aramco IPO.

In fact, they believe that many changes could still go ahead, and even happen faster, now that senior officials no longer have to worry about preparing Aramco for listing.

Since announcing the IPO in 2016, Saudi Arabia’s financial affairs have significantly improved. At the time, oil was being sold for $35 a barrel. However, the price per barrel has rebounded to more than $70 a barrel, which has narrowed Riyadh’s budget deficit and given it more freedom to find other ways to finance its reforms.

Saudi authorities are slowly trying to implement new reforms to attract foreign direct investment. Riyadh also said that it aims to sell an additional $200 billion worth of assets in the upcoming years. Although analysts say that this would be an ambitious move, the postponement of the Aramco IPO may enable “smaller” sales to go through.

“The IPO always had important symbolic value but would not have affected the rest of the Saudi economy very much,” said Steffen Hertog, associate professor at the London School of Economics and Political Science and a leading scholar on Saudi Arabia.

“Challenges like private job creation for Saudis and improving the legal and regulatory environment for local and foreign investors are more important for [the] kingdom’s long-term economic health,” he said.

In July, Aramco said that it might buy a strategic stake in petrochemicals maker, Saudi Basic Industries (SABIC), from PIF, potentially raising the same amount of capital for the sovereign fund that the Aramco IPO would have raised. If PIF were to sell its 70% stake in SABIC to Aramco at market prices, it would raise about $70 billion.

In the meantime, the delay of the Aramco IPO is forcing Saudi Arabia to look for funding elsewhere. The kingdom’s sovereign wealth fund is now seeking $12 billion in loans from international banks, according to a Financial Times report.

If PIF can successfully begin to diversify the Saudi economy and generate new job opportunities without the Aramco IPO, the suspension of the sale might be celebrated as a political victory for Saudi Arabia’s crown prince — especially since some Saudis were uncomfortable with the IPO to begin with.

“The average citizen saw it as a misguided sell-off of the national patrimony. Many Saudi royals worried it would expose their source of wealth and privilege,” said Krane from Rice University. “So there is probably some level of relief in Saudi Arabia that the state is backing away from the plan.”