Last weekend, after Saudi Arabia threatened to cut the world off from its vast oil supply and President Donald Trump puffed his chest in response, one prominent executive from the Kingdom painted a particularly gloomy picture of our energy future.
“If U.S. sanctions are imposed on Saudi Arabia, we will be facing an economic disaster that would rock the entire world,” Al Arabiya general manager Turki Aldakhil wrote in an op-ed. “If the price of oil reaching $80 angered President Trump, no one should rule out the price jumping to $100, or $200, or even double that figure.”
He said such a move would throw the entire Muslim world “into the arms of Iran, which will become closer to Riyadh than Washington,” and “the truth is that if Washington imposes sanctions on Riyadh, it will stab its own economy to death, even though it thinks that it is stabbing only Riyadh.”
That $400 figure was used as MarketWatch’s “call of the day,” which drew all sorts of internet eye-rolling, including this tweet from our own D.C. bureau chief.
I am going to rule it out.
That's me. Ruling it out. https://t.co/iea3hn8ubJ
— Steve Goldstein (@MKTWgoldstein) October 15, 2018
But not everybody thinks the $400 level is so far-fetched.
Jody Chudley of “The Daily Reckoning” blog swam upstream and said he wouldn’t necessarily rule out such a ridiculous move, considering what Saudi Crown Prince Mohammed bin Salman has proven capable of.
“For months now we have been keeping tabs on MBS, warning you that he is a risk to global stability,” he wrote. “But the reality of how dangerous this man is has never been more apparent than right now. Make no mistake, this weapon is very real.”
Chudley says if you don’t believe the prince would use that weapon to destabilize the world and send oil through the roof, you haven’t been paying attention.
He went into MBS’s “impressive list of misdeeds,” including perhaps “the most epic personal shopping spree in the history of mankind.” A $300-million home, a $450-million da Vinci painting, a $500-million yacht, etc.
“On the surface these purchases are obscene,” Chudley wrote. “Dig deeper and it gets even worse. He bought all of these things while putting already dirt poor Saudi citizens on an austerity program meant to offset the drop in global oil prices.”
MBS also bought all this stuff, he pointed out, while locking up other members of the Royal Family under the guise of a corruption shakedown and while creating a humanitarian crisis by launching thousands of airstrikes on Yemen.
“This man’s hypocrisy knows no bounds,” Chudley wrote. “Which leads me to believe there is no reason to believe that this man possesses a conscience that would stop him from unleashing the Saudi oil weapon of mass destruction.”
He says if it does, indeed, come to that, and oil does explode to such unfathomable levels, it would result in “a Mad Max film come to life.”
No sign of Mad Max yet. Oil CLZ8, -1.18% was down more than 1% late Thursday to $68.93 a barrel. It began the week near the $72 level.
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