Saudi Arabia Will Not Repeat 1973 Crude Oil Embargo
The Kingdom said last week it would respond to any economic sanctions linked to the death of Jamal Khashoggi
Saudi Arabia’s energy minister said on Monday that the Kingdom has no intention of repeating the Y 1973 Crude Oil embargo amid the threat of sanctions on the Kingdom.
Some US Senators have argued for the imposing of sanctions on the Kingdom in recent days in response to the killing of dissident Jamal Khashoggi inside a Kingdom consulate in Turkey on 2 October.
In turn, Saudi Arabia said that it would reject any economic sanctions or political pressure from the international community over the incident, which it had described as being carried out by a rogue Saudi security team.
The statement went on to promise if the Kingdom receives any action “it will respond with greater action”, noting its “influential and vital role in the global economy”, an apparent reference to its position as the world’s largest Crude Oil exporter.
Energy minister Khalid Al-Falih told Russia’s TASS news agency that “there is no intention” of repeating the 1973-1974 Crude Oil embargo against the United States, which was enacted by OPEC in response to a US decision to re-supply the Israeli military.
“This incident will pass. But Saudi Arabia is a very responsible country, for decades we used our oil policy as responsible economic tool and isolated it from politics,” he was quoted as saying.
“My role as the energy minister is to implement my government’s constructive and responsible role and stabilizing the world’s energy markets accordingly, contributing to global economic development.”
Mr. Falih further stated that an increase in Crude Oil prices would slow down the global economy and trigger a recession. However, he said there was no guarantee prices will not rise in response to the return of US sanctions on Iran next month.
ICE Brent Crude Oil prices have risen nearly 40% over the last 12 months due to supply concerns linked to falling Iranian Crude Oil exports and disruptions to supply in Libya, Nigeria and Venezuela.
“I cannot give you a guarantee, because I cannot predict what will happen to other suppliers,” Mr. Falih said of whether a return to $100 bbl was likely.
“If 3-M BPD disappears, we cannot cover this volume. So we have to use Oil reserves,”
He added that the Kingdom would soon raise output to 11-M BPD per day from 10.7-M BPD and the country had the capacity for a further increase to 12-M BPD.
Neighboring the UAE could also add another 0.2-M BPD, he said. And the US is producing at record amounts per day now.