How about that left hand. Ace? How about that left-handed draw? Mr. Ace Hanlon. Scourge of the sagebrush. The terror of Tucson. A bladder full of hot air.- The Quick and the Dead
Well Mr. Herod, you did shoot him dead. Not so full now.
So the House of Saud is threatening “responses” to any sanctions issued for their obvious murder of Jamal Khashoggi (Umm… yeah. An interrogation in the Saudi Embassy by 15 Thugs including a Forensics expert with a Bone Saw flown in on a Royal Saudi charter under Diplomatic Immunity is all ‘gentle persuasion gone wrong’ by a bunch of Rogue Agents. As Charlie Piece says “I was cleaning my Bone Saw and it went off!”), how bad could it get?
In the short run, pretty bad. They could stop exporting Oil (which would bankrupt them sooner rather than later which is why they’re attempting economic reforms) and it might temporarily raise the price per Barrel over $200 (translates to about $8 a gallon at the pump, still happy you bought that Ford Explorer?). If Markets panic it might lead to a global recession, but there are plenty of other reasons why there should be one (looking right at you Fed). Soon enough (and it might be very soon) other producers like Iran, Iraq, Brazil, Venezuela, etc. would fill the production gap and while you might not be aware of it the United States is a net Oil exporter and the largest Oil producer in the world. Saudi Arabia is a distant second followed by Russia and Canada.
They sit on a large stash of cash which under Magnitsky Sanctions they could not spend so a big source of new capital would be shut off. Boo who for IPOs. They own an empire of assets they could sell, at a loss. Arms manufacturers would lose their orders and their employees their jobs (until they found others). Again, so what?
Did I mention temporary? The world will get along just fine without Saudi Arabia in the medium term and their society, which depends on handouts from the Petro Biz, will crumble into populist revolt and sectarian violence. The House of Saud will die, root and branch, kneeling to the National Razor.
Bring it you cowards.
Saudis Issued Dire Warnings Against U.S. Sanctions. But How Much Leverage Do They Have?
By Clifford Krauss and Rick Gladstone, The New York Times
Oct. 16, 2018
The Saudis have warned that they could push oil prices to $100 or $200 a barrel, an act that would probably plunge the American and global economies into recession. They have suggested that United States defense companies could forfeit tens of billions of dollars in deals that could instead go to Russia or China.
These threats by Saudi Arabia’s monarchy in recent days were its answer to America’s own threats of punishment over the disappearance and reported killing and dismemberment of a dissident journalist that has shocked the world.
Yet petroleum and defense experts have largely discounted such possibilities.
While Saudi Arabia is still the leading producer in the Organization of the Petroleum Exporting Countries and can exert enormous influence over oil prices, it is no longer the energy superpower that American motorists feared during the Arab oil embargo era of the 1970s.
And as longstanding clients of the American arms industry, the Saudis cannot easily switch to other providers.
“They depend more on us than we depend on them,” said Daryl G. Kimball, the executive director of the Arms Control Association in Washington.
…
The United States is far less dependent on Saudi Arabia and other OPEC members than even a decade ago, when a drilling frenzy began in shale fields across Texas and North Dakota. American production has more than doubled since 2007 — to 10.5 million barrels a day, from 5.1 million barrels a day — and the United States has become a major exporter for the first time in decades.The United States imports only 800,000 barrels a day from Saudi Arabia — 600,000 fewer per day than a decade ago — and much of that goes to a Gulf of Mexico refinery owned by Saudi Aramco, the Saudi national oil company.
A cutoff of Saudi oil, which represents less than 5 percent of American supplies, would harm Aramco and cut Saudi government revenue. And the United States could replace those supplies with oil from other countries or from its own fields.
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Saudi Arabia is by far the biggest foreign recipient of American-made weapons and military gear, according to a database compiled by the Stockholm International Peace Research Institute.But while President Trump has made much of Saudi Arabia as a critical client of United States defense contractors, punctuated by its commitment last year to purchase $110 billion in American weapons, much of that commitment has yet to be fulfilled.
Some experts said that even if Congress moves ahead to penalize the Saudis by suspending arms sales — as appeared increasingly likely in recent days — the economic impact on the United States would not necessarily be painful.
“It would hurt the stockholders of the defense companies, but these companies will do just fine without these weapons sales,” Mr. Kimball said. “It’s not like they’re Sears Roebuck.”
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“Previously, we imagined Saudi Arabia as a bulwark not only in a regional alliance system, but also as the main keeper of stability in the oil market,” said Amy Myers Jaffe, a Middle East oil analyst at the Council on Foreign Relations. “Now, the success of that whole role is being called into question, and the fragility of that stature has been revealed.”