Sanctions Against Saudi Arabia Likely to Cause a Spike in Oil Prices

Saudi Arabia

Saudi Arabia is denying any involvement in the mysterious disappearance of Jamal Khashoggi, a columnist for the Washington Post. On Sunday, the oil-rich nation warned that any economic sanctions imposed by the US government against it would be met with greater action, including a possible hike in oil prices.

The official Saudi Press Agency (SPA) quoted an unnamed official as saying, “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 accusation. The Kingdom also affirms that if it receives any action, it will respond with greater action.”

Leaders from the European Union and the US have piled pressure on the government of Saudi Arabia, with some vowing to boycott an investor conference scheduled to take place in the country later this month. JP Morgan Chase & Co Chief Executive Jamie Dimon is among those who have called off plans to attend the investor conference.

Chairman of Ford Motor Co., Mr. Bill Ford has also canceled his trip to the Middle East, which included attending the conference. AOL co-founder Steve Case, Viacom CEO Bob Bakish, and Uber CEO Dara Khosrowshahi, as well as media organizations, such as the New York Times, the Financial Times and CNN, have also opted out of the event.

Khashoggi is a contributing journalist for the Washington Post and a resident of the US. He has been critical of the policies of the Saudi Arabian leadership and is believed to have disappeared on October 2 upon entering the Saudi consulate in Istanbul, Turkey. Turkish officials say the journalist was killed inside the consulate and his body removed. Saudi officials have denied the allegations, regardless.

President Donald Trump has threatened to impose severe punishment if it turns out that the journalist was murdered in the consulate. The President, however, said that the US would be punishing itself if it sales military sales to the Kingdom.

Germany, Britain, and France said they were treating the case with the utmost seriousness. In a joint statement released on Sunday, the three countries said, “There needs to be a credible investigation to establish the truth about what happened, and – if relevant – to identify those bearing responsibility for the disappearance of Jamal Khashoggi, and ensure that they are held to account.

“We encourage joint Saudi-Turkish efforts in that regard and expect the Saudi Government to provide a complete and detailed response. We have conveyed this message directly to the Saudi authorities,” the statement continued.

Turki Aldakhil, the general manager of Saudi Arabia-based Al Arabiya television wrote an opinion piece on Sunday saying, “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.”