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How Much Damage Can Saudi Arabia Do To The Global Economy? [Video]

Saudi Arabia enjoys a privileged position both in geopolitical and economic terms. It will have a powerful hand to play if tensions with the US and the west escalate and it follows through with Sunday’s warning of retaliation.

Its vast oil reserves – it claims to have about 260bn barrels still to extract – afford the most obvious advantage. The kingdom is the world’s largest oil exporter, pumping or shipping about 7m barrels a day, and giving Riyadh huge clout in the global economy because it wields power to push up prices.

An editorial in Arab News by Turki Aldhakhil, the general manager of the official Saudi news channel, Al Arabiya, offers a hint of what could be in the offing.

He said Riyadh was weighing up 30 measures designed to put pressure on the US if it were to impose sanctions over the disappearance and presumed murder of Jamal Khashoggi inside the country’s Istanbul consulate. These would include an oil production cut that could drive prices from around $80 (£60) a barrel to more than $400, more than double the all-time high of$147.27 reached in 2008.

This would have profound consequences globally, not just because motorists would pay more at the petrol pump, but because it would force up the cost of all goods that travel by road.

Saudi Arabia also supports thousands of US jobs via its arms purchases. It is the world’s second-largest arms importer after India and 61% of those imports come from the US.

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