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Saudi Journalist Jamal Khashoggi Case May Cause Rise in Oil Prices

The case of Saudi Journalist Jamal Khashoggi’s disappearance has become complex after it caused tensions between decade old allies Saudi Arabia and the United States.

It all began when Jamal Khashoggi a Washington Post Op-Ed contributor and staunch opponent of Saudi Crown Prince  Muhammad Bin Salman, mysteriously disappeared from Saudi Consulate in Istanbul. According to reports, Turkey believes that it was Saudi Administration that deliberately killed the journalist. Saudi Arabia has denied the claims.

Reaction to Saudi Journalist Jamal Khashoggi Disappearance

Saudi Arabia has faced a fierce criticism after Turkish media reports that Saudi administration was responsible for Jamal Kashoggi disappearance. It is interesting that both Turkey and Saudi Arabia have failed to furnish some solid evidence to support their claims. Despite this, the United States and European Union both have criticized the Kingdom.

Trump in his interview with CBS described the incident “disgusting” because Khashoggi was a journalist and he intended to give “severe punishment” to KSA if it was involved in the incident.

Reaction from the United States Companies

The first blowback for Saudi Arabia came when Riyadh Stock Market faced a drop of 7%, the biggest in the recent past. After UK, France, and Germany asked Saudi Arabia for thorough investigations, many significant companies also retaliated. Jamie Dimon of JP Morgan, For CEO Bill Ford and Uber  CEO Dara Khusroshahkhi pulled from an investment conference set to take place in Saudi Arabia. The similar reaction came from the CEOs of Bloomberg and CNN.

A Possible Saudi Arabia Retaliation

Analysts and economists are fearing that western pressure against Saudi Arabia may cause an increase in crude oil prices. The Kingdom is in a position to impact the oil price due to its vast reserves of 250 billion barrels. Even though the world is looking to renewable resources of energy, crude oil is still a major fuel for running industries and vehicles.

Trump in No Position to Mess with Saudi Arabia

Further, Saudi Arabia is the leading arms importer from United States. The companies like Lockheed Martin, General Electric and Boeing are the primary beneficiaries of $110 billion worth defense agreement signed between the two countries last year. Even President Trump is quite familiar with the fact, and in his interview with CBS news, he talked about punishing Saudi Arabia without hurting jobs. But, POTUS didn’t mention what could be the way of retaliation because sanctioning trade ties with the country with an abundant oil wealth and a lucrative arms market is not an option.

Also Read:

Saudi Prince Talks About Gender Equality Ahead US Visit

Bilal
Bilal is a graduate in Economics and Political Science. He has a keen interest in political and economic issues. He conducts in-depth analysis on policy matters and produces research-based reports to keep the readers equipped with latest facts.
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