RIYADH

Saudi King Salman has pledged to maintain existing energy and foreign policies, then quickly moved to appoint younger men as his heirs, settling the succession for years to come by naming a deputy crown prince from his dynasty's next generation.

King Abdullah, who died late on Thursday after a short illness, was buried in an unmarked grave in keeping with local religious traditions.

By appointing his youngest half-brother Muqrin, 69, as Crown Prince and nephew Mohammed bin Nayef, 55, as Deputy Crown Prince, Salman has swiftly quelled speculation about internal palace rifts at a moment of regional turmoil.

Oil prices jumped in an immediate reaction as news of Abdullah's death added to uncertainty in energy markets.

Salman, thought to be 79, takes over as the ultimate authority in a country that faces long-term domestic challenges compounded by the plunging price of oil in recent months and the rise of the Islamic State militant group in Iraq and Syria, which vows to toppled the Al Saud ruling family.

Salman must navigate an intense rivalry with Shi'ite Muslim power Iran playing out in Iraq, Syria, Yemen, Lebanon and Bahrain, open conflict in two neighbouring states, a threat from Islamist militants and bumpy relations with the US.

In his first speech as king, shown live on Saudi television, Salman pledged to maintain the same approach to ruling the world's top oil exporter and birthplace of Islam as his predecessors and called for unity among Arab states.

"We will continue, God willing, to hold the straight course that this country has followed since its establishment by the late King Abdulaziz," he said.

Mohammed bin Nayef becomes the first grandson of the kingdom's founding monarch, King Abdulaziz, known as Ibn Saud, to take an established place in the line of succession.

All Saudi kings since Abdulaziz's death in 1953 have been his sons and the move to the next generation had raised the prospect of a palace power struggle. King Salman also appointed his own son, Mohammed bin Salman, Defence Minister and head of the royal court.

The rapidity of the decisions startled Saudis, used to a delay of up to several months before top appointments following the deaths of their monarchs. The choice of Mohammed bin Nayef was seen by some as a reflection of his strong record in counter-terrorism in his role as interior minister.