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Saudi Arabia’s oil weapon doesn’t work

30 2 1
17.10.2018

Saudi Arabia is unlikely to employ its so-called “oil weapon” in the diplomatic crisis over the disappearance of a journalist after visiting the country’s consulate in Istanbul.

Experience from the last time Saudi Arabia tried to use oil sales as a diplomatic instrument in 1973/74 shows such action does not work and the kingdom itself would be the biggest victim.

Despite some of the impassioned rhetoric in Saudi media, self-interest makes it improbable the government will retaliate by reducing oil sales or trying to drive up prices.

That has not stopped some veiled threats to weaponise oil production and prices, but they should be interpreted as an urgent plea for support and understanding rather than a serious threat.

“If US sanctions are imposed on Saudi Arabia, we will be facing an economic disaster that would rock the entire world,” according to one heated editorial.

“Riyadh is the capital of (global) oil and touching this would affect oil production before any other vital commodity,” the editorial warned.

If the price of oil reaching $80 a barrel angered US President Donald Trump, “no one should rule out the price jumping to $100, or $200, or even double that figure”, the author said bluntly.

The government’s official response has been more circumspect but it nonetheless warned that it would respond to any action with even greater retaliation and pointed to the kingdom’s “influential and vital role in the global economy”.

Read: Saudi consul general leaves Turkey for Riyadh

In October 1973, Saudi Arabia and the other Arab oil producers announced that they would start cutting production by 5 percent per month until Israeli forces evacuated from occupied Arab territories.

In addition, Saudi Arabia and the other Arab producers announced an embargo on oil sales to the United States and a number of other countries.

Global........

© Middle East Monitor