(Recasts, adds diplomat comment)

By Andrew Hammond

RIYADH, March 22 (Reuters) - Saudi Arabia's King Abdullah on Thursday re-appointed his cabinet, with all ministers including Oil Minister Ali al-Naimi keeping their posts despite speculation of major changes, Saudi media reported.

"The cabinet has been reformed with all current ministers continuing in their posts," said the royal decree, which set time periods for some other official appointments.

Saudi rulers have set a pattern of announcing new cabinets every four years at the onset of the third month of the Islamic calendar and a reshuffle was expected this week.

Familiar with Naimi as the most influential minister in the Organization of the Petroleum Exporting Countries over the past 12 years, the world oil markets welcomed his reappointment after serving three four-year terms at the helm of oil policy in the world's biggest oil exporter.

"It's a relief for the world oil market to know that Ali al-Naimi is to stay on as oil minister," said Gary Ross, chief executive at U.S. energy consultancy PIRA Energy.

"He is the architect of a very successful and consistent OPEC strategy."

Born in 1935, Naimi is one of the longest-serving ministers from outside the Saudi royal family, some of whose members have served in the same cabinet posts for some three decades.

There are no hard-and-fast rules in the opaque ruling system of the world's largest oil exporter, and ministers have often been replaced at other times.

Western diplomats and analysts, who had said the reshuffle could be delayed until after next week's Arab summit, noted that the statement read on Saudi state television did not specify that the ministers would serve full four-year terms.

They said there could be changes in weeks or months ahead.

"It's ridiculous if this is for only another few weeks, or the idea that everything is happy in the magic kingdom ... and there is no change of ministers in some 8 years," one said.

"If ever there was an example of poor political leadership, there you have it," he added.

NO DECISION

"The decision is not to make a decision, so we continue with the same stagnation in domestic policy," said Britain-based Saudi analyst Mai Yamani.

"You still see the same faces of octogenarian rulers and ministers who have been there for 30 and 40 years in the same post, with the frustration of the people as well as other princes who are waiting," she said.

The announcement means that Prince Saud al-Faisal remains Saudi foreign minister, despite expectations that ill-health would force the veteran diplomat out.

His retirement would have raised sensitive questions over finding a replacement for a popular minister who represents an important branch of the royal family.

Choosing a new foreign minister from among the close family of any of the most powerful royals could create friction in what is a delicate balance of power within the ruling dynasty.

King Abdullah ascended the throne in August 2005.He is seen as a cautious reformer.

Militants sympathetic to al Qaeda have been waging a campaign of violence to end Saudi rule since 2003. (Additional reporting by Richard Mably)

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