Jamal Khashoggi 'Murder' Fallout: Crude Oil Surges by 2% as Saudi Arabia Warns Retaliation to Possible US Sanctions
Derek pumps in a oil field on the outskirts of Riyadh | (Photo Credits: Getty Images)

Washington, October 15: Journalist Jamal Khashoggi's disappearance, which many have called a "planned murder" inside the Saudi consulate in Istanbul, has led to an unprecedented deterioration in US-Saudi ties. With President Donald Trump promising to "punish" the Kingdom if found responsible for the scribe's assassination, Riyadh has struck back warning a befitting retaliation.

The geopolitical spat has already impacted the oil-importing nations, with the mere threat of Saudi retaliation pushing the crude oil rates to $81.92 a barrel -- a 2 per cent increase as compared to the price it was trading till Saturday midnight. Donald Trump for Severe Punishment in Saudi Journo Jamal Khashoggi's Disappearance but Opposes Cancelling USD 110 Billion Arms Deal.

Although Riyadh has not explicitly mentioned crude oil as one of its weapon to combat US sanctions, experts claim the Kingdom would not blink twice before using its oil reserves to flex against the West.

"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 statement further adds that Saudi would "respond with greater action" if slapped with sanctions. In what could be perceived as a warning to cut down crude exports, official said that "our retaliation" would have a far-reaching impact on the global economy.

The last-time Saudi used the crude reserves as a geopolitical weapon was in 1973-74, when a coalition of Arab nations were locked in a war with Israel. Although Riyadh refrained from being dragged into direct-combat, it opposed US' intervention by briefly suspending the oil export.

While the US stand on Khashoggi's alleged murder has aggravated ties with Saudi, reporters in the Gulf region claim that the Royal Family was irked with Trump issuing them a veiled threat while speaking on the sidelines of UNGA last month.

While addressing a gathering, the US President had said that "King Salman won't survive for a week without America's support". Riyadh's muted response to Trump's remark had generated flak towards the victim from the Muslim world, with archrival Iran taking a potshot saying, "the man who claims to be the custodian of two holy mosques is under someone else's custody".