(Adds analyst comments, background)
RIYADH, Feb 1 (Reuters) - Saudi Arabia's King Abdullah has named former intelligence chief Prince Muqrin bin Abdulaziz as second deputy prime minister, a role historically seen as making the incumbent second in line to become king.
Holders of the position have gone on in the past to be crown prince of the world's top oil exporter, where the ruling family controls most senior government posts and, in the absence of elections, wields near absolute authority.
The role means Muqrin will be in charge of the day-to-day running of government if both King Abdullah, who is also prime minister, and Crown Prince Salman, who is first deputy prime minister, are both unwell or travelling abroad.
"He knows a lot about foreign affairs. I find him to be receptive to new ideas, to change. He knows which way the world is heading," said Khaled al-Maeena, editor in chief of the Saudi Gazette English-language daily.
Muqrin, who is about 70, is the youngest son of the kingdom's founder Abdulaziz ibn Saud, and headed Saudi intelligence until July.
"His Royal Highness Prince Muqrin bin Abdulaziz al-Saud, adviser and special envoy to the Custodian of the Two Holy Mosques, is appointed second deputy to the prime minister," said a Royal Court decree carried by the state news agency SPA.
Saudi Arabia, a strategic ally of the United States and the birthplace of Islam, faces long-term domestic worries such as growing energy consumption and high youth unemployment as well as fears about regional instability after the Arab Spring.
King Abdullah is nearly 90 and had a long back operation in November, his third round of surgery in two years. He has since been seen on television chairing cabinet and meeting visiting leaders. Crown Prince Salman, who turns 77 this year, gave a speech on his behalf at a recent Arab summit in Riyadh.
The succession beyond King Abdullah, who is the fifth of Ibn Saud's sons to reign, is a sensitive subject among the al-Saud dynasty's hundreds of princes.
Unlike European monarchies, Saudi Arabia has no formal line of succession beyond the king and crown prince. Under new rules made by Abdullah in 2006, the succession must in future be determined with the help of a council of the ruling family.
That means the position of second deputy prime minister does not necessarily mean its holder will automatically become crown prince after the death of the king, as was the case in the past.
The last person to hold the position of second deputy prime minister was Prince Nayef, who went on to become crown prince before he died last June. The post had also been held by Abdullah, by the late King Fahd and by Crown Prince Sultan, who died in 2011.
Saudi Arabia's executive branch, headed by King Abdullah, can act through the cabinet or through the Royal Court.
"The appointment of Muqrin to this post means the position of prime minister might start to carry more weight relative to the royal court," said Hossein Shobokshi, a prominent Saudi columnist.
The royal court and its head, Khaled al-Tuwaijri, have been the focus of criticism from ultra-conservatives who oppose the cautious reforms King Abdullah has pushed to ease restrictions on women.
Muqrin, born in 1943, is a former air force officer who trained in Britain and later served as governor of the Hail and Medina regions of Saudi Arabia.
He was made foreign intelligence chief in 2005 but was replaced last year by Riyadh's former ambassador to Washington, Prince Bandar bin Sultan. Muqrin has always been seen as an outsider in the succession process because his mother was from Yemen.
Since being replaced as intelligence chief, Muqrin has acted as an adviser to the king, and diplomats say he has played a role in major meetings between the monarch and visiting foreign leaders. (Reporting by Angus McDowall; Writing by Raissa Kasolowsky; Editing by Kevin Liffey)