Saudi Arabia’s stock exchange plummeted on Sunday, with the index down some 7 percent in early trading on fears of international sanctions over the disappearance of journalist Jamal Khashoggi.
In comments likely intended to address the domestic investors’ concerns, Saudi officials issued a statement threatening “greater action” against the US and other Western nations for any actions taken related to Khashoggi’s disappearance and presumed murder.
Saudi state media published an opinion piece from one of their managers saying the kingdom is ready to implement measures against the US economy that would result in oil prices skyrocketing. He added that “if Washington imposes sanctions on Riyadh, it will stab its own economy to death.” The same piece also suggested an end to US-Saudi intelligence sharing, and a Saudi-Russian alliance.
The threats are a similar tack to the Saudi threats in 2016 surrounding the US Congress planning to strip them of sovereign immunity over their role in 9/11. In that case, Saudi officials also openly threatened to destroy the value of the US dollar by flooding the debt market.
While historically the combination of economic threats and juicy military contracts have been enough for the Saudis to get their way in almost all things, and that’s clearly the message officials are attempting to send to investors, there is a risk that such overt threats are going to further rile a US Congress that is already furious about the Khashoggi affair, and speed up the path to measures like arms sales restrictions.