Oil Shocker: Saudi Threatens Oil Prices ‘Could Double or More’ If Sanctioned
Saudi Arabia is threatening retaliation for any sanctions imposed against it after U.S. president Donald Trump said the oil-rich kingdom deserves “severe punishment” if it is responsible for the disappearance of Washington Post journalist Jamal Khashoggi.
The threat came after the world’s top oil exporter saw its stock exchange tank more than seven percent.
Khashoggi disappeared after visiting the Saudi Consulate in Istanbul last week. U.S. lawmakers joined Germany, France and Britain in calling for a “credible investigation” into his disappearance.
Turkish officials believe Khashoggi was killed and dismembered in the Saudi consulate after the New York Times reported a team of Saudi agents flew into Istanbul and then left the same day.
Trump tweeted Monday he is sending Secretary of State Mike Pompeo to meet with Saudi King Salman.
Just spoke to the King of Saudi Arabia who denies any knowledge of whatever may have happened “to our Saudi Arabian citizen.” He said that they are working closely with Turkey to find answer. I am immediately sending our Secretary of State to meet with King!
— Donald J. Trump (@realDonaldTrump) October 15, 2018
Saudi-owned Al Arabiya General Manager Turki Aldakhil warned in a column Sunday that sanctions on the world’s largest oil exporter will spark a global economic disaster.
Per Yahoo News:
“It would lead to Saudi Arabia’s failure to commit to producing 7.5 million barrels. If the price of oil reaching $80 angered President Trump, no one should rule out the price jumping to $100, or $200, or even double that figure,” he wrote.
Investors fear the disappearance could further add to the sense that Saudi policy is becoming more and more unpredictable under Crown Prince Mohammed bin Salman.
A Gulf banker said the Khashoggi case, combined with other events, had become a significant factor for some potential investors.
“It’s cumulative – the Yemen war, the dispute with Qatar, the tensions with Canada and Germany, the arrests of women activists. They add up to an impression of impulsive policy-making, and that worries investors,” the banker said.
For its part, Saudi Arabia is denying involvement.
“The Kingdom affirms its total rejection of any threats and attempts to undermine it, whether by threatening to impose economic sanctions, using political pressures, or repeating false accusations,” the official Saudi Press Agency (SPA) quoted an unnamed official as saying.
“The Kingdom also affirms that if it receives any action, it will respond with greater action, and that the Kingdom’s economy has an influential and vital role in the global economy,” the official added, without elaborating.