Earlier it was viewed as a hidden threat, but now Saudi Arabia has hinted its oil wealth could be used as a political weapon if any measure is taken against the country in connection to the disappearance of Washington Post columnist Jamal Khashoggi.
Since the 1973 Arab embargo, when oil crisis was triggered, Riyadh never vowed to retaliate with such strength as it always talked about the growth of global economy.
The kingdom is largest oil exporter in the world and said Sunday its economy plays vital and influential role in the global economy. Making a reference to its petroleum wealth it threatened to retaliate on any punitive measures linked to Khashoggi, who disappeared after visiting Saudi consulate in Istanbul. Turkey is claiming he has been murdered inside as he never emerged from it thereafter.
Owner of state-owned Arabiya news network, Turki Al Dakhil, expressed that if Trump was angered by $80 oil, the price may rise to $100 and $200.
However, Saudi embassy in Washington was quick enough to sideline the comments of Dakhil saying he is not Saudi official and his speaking was private.
Later, Saudi energy minister Khalid Al-Falih said they will be a responsible actor in keeping the global oil market stable.
Using a speech in India he added, “I want to assure markets and petroleum consumers around the world that we want to continue support the growth of the global economy, the prosperity of consumers around the world.”
Meanwhile, in early trading on Monday the oil price was seen rising as much 2 percent to $81.92 a barrel citing that just a hint of oil to be used as an economic weapon brought back memories of standing in queues at filling stations in the western world.
It is very true the kingdom can bring global economy to knees if oil output is cut and prices to rise sharply. It pumps about 10 percent of barrels produced worldwide. The price could easily reach $100 a barrel even if it hints not to replace the lost barrels.
However, one theory believes the Saudi’s retaliation could lead to oil demand destruction and acceleration could be seen into electric and renewal energy cars.