Saudi Arabia declares that it will retaliate against any sanctions taken against Khashoggi's case

DUBAI / WASHINGTON (Reuters) – Saudi Arabia on Sunday warned of threats of punishment against journalist Jamal Khashoggi last week, as his European and US allies exerted considerable pressure.

Khashoggi, an American resident and a Washington Post columnist criticizing Riyadh's policy, disappeared on October 2 after entering Saudi Arabia's consulate in Istanbul. Turkey thinks that he was murdered and his body removed. Saudi Arabia has denied this.

US President Donald Trump has threatened to "punish severely" if it turns out that Khashoggi was killed at the consulate, although he said Washington would "punish" itself if it stopped military sales in Riyadh.

"The Kingdom affirms its total rejection of any threat and its attempts to undermine, whether by threatening to impose economic sanctions, by making use of political pressure or by repeating false accusations," said an unidentified official. of the Saudi Press Agency (SPA).

"The Kingdom also claims that if it receives any action, it will react with more action and that its economy has an influential and vital role in the global economy," he added.

The Saudi Embassy in Washington then tweeted what it called a clarification, thanking countries, including the United States, for "refraining from hasty conclusions".

In a sign, the Saudi king Salman bin Abdulaziz Al Saud could seek a diplomatic solution to this incident. He stressed the strength of the Israeli-Turkish ties during a telephone interview with Turkish President Tayyip Erdogan, the Saudi press agency announced on Sunday.

The King thanked Erdogan for welcoming the Saudi proposal to form a joint working group to discuss Khashoggi's disappearance and said that no one could harm their relations.

EUROPE SEEKS A CREDIBLE INQUIRY

Europe's largest economies, Britain, France and Germany, said Sunday that they were dealing with the "most serious" case.

"A credible investigation is needed to establish the truth about what happened and – where appropriate – to identify those responsible for Jamal Khashoggi's disappearance and ensure that they are held accountable", said the countries in a joint statement.

"We encourage joint Saudi and Turkish efforts in this regard and expect the Saudi government to provide a comprehensive and detailed response. We sent this message directly to the Saudi authorities. "

The statements of the British Jeremy Hunt, the French Jean-Yves Le Drian and the German Heiko Maas make no mention of the potential actions that countries could undertake. Hunt later said that while it was proven that Saudi Arabia was guilty, "we had to think about the proper way to react in this situation".

WASHINGTON REACTS

US senators have called for reactions ranging from the boycott of an upcoming economic summit in Riyadh to the end of support for Saudi military operations in Yemen.

"If they dragged this man into this consulate, they would go to medieval times. He was killed, he was cut in pieces and they sent a surveillance team to kill him and do all that, it would be a scandal, "Florida Senator Marco Rubio said the state of CNN Union.

"The mere fact that they are an ally of an important mission, which slows down Iran's expansion into the region, can not allow us to ignore or distance ourselves from it."

His fellow Republican of Arizona, Jeff Flake, who participated in ABC's "This Week" show, called for a "harsh action" that he said would affect the sale of the company. weapons and involvement in Yemen.

The Saudi stock market fell 7% early trading on Sunday, one of the first signs of economic difficulties that Riyadh may suffer in this case. In the end, he had recovered losses, ending down 3.5% and losing $ 16.5 billion in market value.

Senators have triggered a provision of the Human Rights Liability Act around the world that requires the president to determine whether a foreign person is responsible for a blatant violation of human rights. 39; man. The law has in the past imposed visa bans and the freezing of assets to Russian officials.

Anti-Saudi sentiment in the US Congress could eventually push for passage of the no-cartel oil production and export cartel that would end sovereign immunity protecting OPEC members from prosecution US.

OIL PRICE WARNING

In a column just after the SPA statement, Turki Aldakhil, chief executive of the Saudi channel Al Arabiya, warned that imposing sanctions on the world's largest oil exporter could provoke a global economic disaster. .

"This would prevent Saudi Arabia from pledging to produce 7.5 million barrels. If the price of oil reaching $ 80 irritated President Trump, no one should exclude the price from $ 100 to $ 200, or even double, "he wrote.

Investors are increasingly concerned that the disappearance of Khashoggi suggests that Saudi politics has become increasingly unpredictable under Crown Prince Mohammed bin Salman, who advocates economic and social reforms, but which has also led to a tensions between several countries.

A Gulf banker said that the Khashoggi case, combined with other events, had become an important factor for some potential investors.

"It's cumulative – the war in Yemen, the dispute with Qatar, the tensions with Canada and Germany, the arrests of activists. They add an impression of impulsive policy making, which worries investors, "said the banker.

Foreign capital is the key to Saudi projects for economic diversification and job creation. But in response to Khashoggi's disappearance, the media and some technology executives withdrew from the planned Riyadh investment conference next week.

US Treasury Secretary Steve Mnuchin still intends to attend, but that could change, said Larry Kudlow, director of the National Economic Council of the White House, in "This Week."

ACCESS CONSULATE

The crisis has polarized the Saudis, some accusing the enemies of the nation and others concerned about the direction taken by the country under Prince Mohammed.

Prince Khaled al-Faisal, senior official of Saudi Arabia's ruling family and chief advisor to King Salman, met with Erdogan to discuss Khashoggi's disappearance, two informed sources told Reuters.

A Turkish official told Reuters on Sunday that the Saudis had declared that they would authorize a search of the consulate and that this would happen by the end of the weekend, although he conceded "to flexibility on this date ".

"But Turkey is determined to enter the consulate and carry out a criminal inspection. There is no alternative to this inspection. Time is important in terms of evidence, "said the manager.