Saudis Hint At Oil Market Intervention Amid Turmoil Over Khashoggi’s Death
Following steady increases in U.S. production, Saudi Arabia’s government has suggested it will work to decrease the world’s stockpile of oil.
“We [have] entered the stage of worrying about this increase,” Saudi Energy Minister Khalid Al-Falih said Thursday to al-Ekhbariya, a state-owned broadcaster. The kingdom’s top energy official said that, after “tireless efforts during the past year and a half,” intervention might be necessary in order to reach stability.
Al-Falih’s comments come as Brent crude oil has dropped by more than $10 a barrel since reaching a high of $86.74, falling 1.1 percent by Thursday morning. The United States, which is experiencing a shale oil boom, has seen its oil production skyrocket over the past 10 years, hitting a record high of 11.2 million barrels a day in October. Internal reports spread among Organization of Petroleum Exporting Countries (OPEC) officials reveal they are closely monitoring U.S. production numbers. (RELATED:Before Killing Of Journalist, Elite US Universities Took $600 Million From Saudi Arabia And Affiliates)
As the world prepares for the U.S.’s reimposition of sanctions against Iran on Nov. 4 — which will affect the global supply of oil — international politics could make matters more complicated.
There is growing pressure for the U.S and other countries to enact sanctions against Saudi Arabia for the killing of Jamal Khashoggi, a former Washington Post contributor and noted critic of the Saudi government. Saudi Crown Prince Mohammed bin Salman at first denied his government was involved in Khashoggi’s disappearance. Later, Saudi officials acknowledged that he was killed at their consulate, alleging it was the result of a fight. However, they are now saying his death may have been premeditated.
Saudi Arabia initially threatened to enact retribution against any country that implemented sanctions over the Khashoggi affair, using its vast oil supply as influence. However, Al-Falih later said the Saudis have “no intention” of cutting off oil supply to other countries — bringing a sigh of relief to world leaders fearful of a 1973-style embargo.
“Saudi Arabia is a very responsible country, for decades we used our oil policy as responsible economic tool and isolated it from politics. So lets hope that the world would deal with the political crisis, including the one with Saudi citizen in Turkey, with wisdom,” the Saudi energy minister said in an interview published Monday.
“And we will exercise our wisdom both in political and economic fronts,” he continued.
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