Saudi Energy Minister Khalid al-Falih has seen his portfolio slashed in a move seemingly predicated on jumpstarting the kingdom’s stalled investment drive and Aramco’s IPO. Neither aim is guaranteed success.

The past week has seen the biggest shakeup of Saudi Arabia’s oil sector since 2016. Energy Minister Khalid al-Falih has had his ministerial portfolio reduced and has been replaced as Saudi Aramco chairman by Yasir al-Rumayyan, the head of the PIF sovereign wealth fund....