Saudi Arabia's Mohammed bin Salman appointed Crown Prince - SPA

Saudi Arabia's Deputy Crown Prince Mohammed bin Salman was promoted to crown prince on Wednesday, replacing his cousin in a sudden announcement that confirms King Salman's 31-year-old son as next ruler of the kingdom.

Saudi Crown Prince Mohammed bin Nayef has been relieved of his post and replaced by Mohammed bin Salman who becomes deputy prime minister and retains his defence and other portfolios, a royal decree issued by the Saudi state agency said SPA.

Although Mohammed bin Salman's promotion was expected among close circles it came as a surprise at a time the kingdom is facing escalating tensions with Qatar and Iran and is locked in an air war in Yemen.

Prince Mohammed bin Nayef, for years the kingdom's counter-terrorism chief who put down an al Qaeda campaign of bombings in 2003-06, is relieved of all positions, the decree said.

Even as deputy crown prince, Mohammed bin Salman has been responsible for running Saudi Arabia's war in Yemen, dictating an energy policy with global implications and spearheading plans for the kingdom to build an economic future after oil.

Al Arabiya television reported that the promotion of the prince was approved by the kingdom's Allegiance Council, and that the king had called for a public pledging of loyalty to Mohammed bin Salman on Wednesday evening in Mecca.

That the royal succession in the world's top oil exporter is closely scrutinised only makes the rapidity of Mohammed bin Salman's rise to power, and the speed with which his better known cousins were brushed aside, more astonishing.

The surprise announcement follows 2-1/2 years of already major changes in Saudi Arabia, which stunned allies in 2015 by launching an air war in Yemen, cutting back on lavish subsidies and proposing in 2016 the partial privatisation of state oil company Aramco.

Last year Mohammed bin Salman, or "MBS" as he is widely known, announced sweeping changes aimed, as he put it, at ending the kingdom's "addiction" to oil, part of his campaign to tackle systemic challenges that the kingdom has previously failed to address.

Until his father Salman bin Abdulaziz Al Saud became Saudi Arabia's seventh king in January 2015, few people outside the kingdom had ever heard of Prince Mohammed, seen more than two years on as the power behind its throne.

Regarded warily by some Saudis and by many foreigners as an unknown quantity in the Middle East's traditional status quo power, Prince Mohammed has over the past year set about building his profile with interviews in some Western media.

For many Saudis those changes have become inextricable from the person of Prince Mohammed, whose photographs adorns walls, car windows and advertising hoardings across the country and who has assumed a startling array of powers.

He is Defence Minister, a role that in Saudi Arabia gives its incumbent command of one of the world's biggest arms budgets and makes him ultimately responsible for Saudi Arabia's unprecedented military adventure in Yemen.

He also heads the Council for Economic and Development Affairs (CEDA), a group of cabinet ministers who meet weekly and which oversees all elements of policy that touch on the economy or social issues like education, health and housing.

Prince Mohammed chairs the supreme board of Aramco, making him the first member of the ruling family to directly oversee the state oil company, long regarded as the preserve of commoner technocrats.

But perhaps most importantly, he also holds the critical position of gatekeeper to his father, King Salman, who in Saudi Arabia's absolute monarchy retains the final say in any major decision of state.

Outside Saudi Arabia, that rapid advance and the sudden changes to longstanding policies on regional affairs, energy and its economy have prompted unease, adding an unpredictable edge to a kingdom that allies long regarded as a known quantity.

Inside, they have prompted admiration among many younger Saudis who regard his ascent as evidence that their generation is taking a central place in running a country whose patriarchal traditions have for decades made power the province of the old