Saudi Arabia made clear Sunday it would not take any threats against the kingdom lightly, vowing that it would retaliate against any sanctions imposed by other countries. The statement from an unnamed government official appeared to be a response to President Donald Trump’s threat of “severe punishment” for the world’s largest oil exporter if it’s proven that the country was responsible for the disappearance of journalist Jamal Khashoggi in Istanbul.
“The kingdom affirms its total rejection of any threats or attempts to undermine it whether through threats to impose economic sanctions or the use of political pressure,” an unnamed government source told the official Saudi Press Agency. “The kingdom also affirms that it will respond to any action with a bigger one. The Saudi economy has vital and influential roles for the global economy.” The statement doesn’t ever mention Trump or Khashoggi but it did come shortly after Trump said in an interview that he wanted to get to the bottom about what happened to the journalist.
“Nobody knows yet, but we’ll probably be able to find out,” Trump said when asked whether Saudi Crown Prince Mohammed bin Salman gave an order to kill Khashoggi. “We’re going to get to the bottom of it and there will be severe punishment,” Trump said in an interview with CBS’ 60 Minutes, according to excerpts released Saturday. The Independent also reported that U.K. officials have started writing up a list of Saudi officials who could come under sanctions if an investigation does show the kingdom was behind Khashoggi’s disappearance.
The threats against Saudi Arabia caused the kingdom’s stock market to plunge Sunday, showing how the rising tensions could severely hit Saudi Arabia’s economy. In another hint at how Riyadh is facing condemnation for its actions, media firms and some executives have already pulled out of a major investment conference that is scheduled to take place in Saudi Arabia’s capital next week and had been dubbed “Davos in the desert.” “This is happening at a time when Saudi Arabia is preparing for a big investment event and they don’t need people suspending or pulling out investments,” Nadi Barghouti, head of asset management at Emirates Investment Bank in Dubai, told Reuters.
The big question, of course, is whether Saudi Arabia would be willing to use its oil exports to retaliate against any sanctions. It wouldn’t’ be the first time but would mark a sharp change in strategy for the kingdom. Bloomberg explains:
Saudi Arabia used its petroleum resources as a political weapon when it led an Arab oil embargo during the 1973 war between Israel and a coalition of Arab states. Since then, Riyadh has always put oil above politics, promising stable supply under any scenario. The biggest oil consumers at the time, including the U.S., Japan and Germany, responded by creating strategic oil reserves ready to be used in the event of a major disruption. Most industrialized nations today hold enough crude to cover 90 days of imports.