London —
Saudi Arabia has warned of “its influential and vital role in the global economy” after US President Donald Trump said the kingdom could face severe consequences following the disappearance and alleged murder of the journalist Jamal Khashoggi.

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A statement Sunday on the state-run Saudi Press Agency website, citing an official source, said: “The kingdom affirms its total rejection of any threats and attempts to undermine it.” This followed remarks made by Trump during a 60 Minutes interview released Saturday in which he warned Riyadh could “face severe punishment” if it was proven that Khashoggi had been killed inside Saudi Arabia’s consulate in Istanbul.

Brinkmanship between the world’s largest crude exporter and the US, the biggest consumer nation, comes at a difficult time for the market with oil continuing to trade above $80/b. According to Energy Information Administration data, the kingdom exported 876,000 b/d of crude to the US in July.

The Saudis are coming under intense international pressure over Khashoggi’s disappearance, but officials have so far denied any wrongdoing on the part of the government.

“The kingdom also affirms that if it receives any action, it will respond with greater action, and that the kingdom’s economy has an influential and vital role in the global economy,” SPA reported.

Saudi Arabia has cranked up its own oil output in the second half of this year to compensate for impending US sanctions against Iran due to come into force next month. The kingdom’s oil minister Khalid al-Falih said earlier this month the country is pumping around 10.7 million b/d, a near all-time-high.

Trump has repeatedly called on the kingdom and its partners in OPEC to increase output to ease prices and criticized the group’s actions despite close relations between the administration and Crown Prince Mohammed bin Salman, heir to the Saudi throne and its most powerful official below the ruler.

Calls to Saudi officials for comment weren’t answered on Sunday.

Stocks on the Saudi TSI index fell 7% in early trading Sunday before recovering slightly. In two sessions it lost $50 billion (?38 billion) of its $450 billion value, French news agency AFP reported.

And Britain and the US are considering boycotting a major international conference in the capital Riyadh after Khashoggi’s disappearance, the BBC and others reported Sunday.

A number of sponsors and media groups have already decided to pull out of this month’s investment conference, dubbed “Davos in the Desert.”

–Andrew Critchlow,

–Edited by Maurice Geller,

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