Saudi Arabia Points the Oil Weapon at Itself - Bloomberg

Saudi Arabia Points the Oil Weapon at Itself - Bloomberg:

“Nice global economy you’ve got there; shame if something should happen to it” is not a great pitch for oil and definitely not for the IPO of Saudi Aramco.

The best that can be said about Saudi Arabia’s gossamer-veiled threat of retaliation for any punishment over the disappearance of journalist Jamal Khashoggi is that it’s probably mere posturing. On Sunday, the foreign ministry put out a statement emphasizing the country “has an influential and vital role in the global economy.” (They’re talking about oil.) But by Monday, the country’s oil minister was making soothing noises about keeping the market stable, and the king had ordered an investigation into Khashoggi’s fate. Because actually using, or even seriously threatening to use, the oil weapon would be a self-own of colossal proportions. 

Politically, Crown Prince Mohammed bin Salman, seen as the de facto ruler of Saudi Arabia, is locked in an embrace with President Donald Trump. If Trump’s tweets are anything to go by, he is antsy about rising gasoline prices ahead of midterm elections, now only about three weeks away. His transactional approach to foreign relations means he likely feels he is owed something for pulling the U.S. out of its nuclear deal with Saudi Arabia’s arch rival, Iran. Indeed, speaking of the oil-for-security bargain underpinning Washington-Riyadh relations for decades, the president has said the country wouldn’t last two weekswithout U.S. support. And while Saudi Arabia has a warmer relationship with Moscow these days than it once did, outright confrontation with the U.S. is unthinkable.