In the “World is Not Enough”, British spy James Bond takes on international oil cartels and illegal operators. The fiction of the story is clear to all, but the underlying subject is still very valid, as the ongoing media riot about Washington Post journalist Khashoggi, a Saudi national, is putting pressure on the House of Saud.
The disappearance of the former Saudi journalist, presumably in the Saudi Consulate in Istanbul, last week, is causing a diplomatic and strategic conflict between the West and Saudi Arabia of unprecedented levels. British spy-novel writers John LeCarre and Ian Fleming would have been flabbergasted these days, when looking at the growing crisis surrounding Saudi Arabia’s international standing and the position of Saudi Crown Prince Mohammed bin Salman. The possible role of the Royals in the abduction of Khashoggi, supported by the Saudi Royal Court and secret services, will not blow over without leaving immense scars. The current crisis will not just have possible repercussions for the Kingdom, as its international standing is being threatened, it was also influence the power game currently ongoing in the Royal Palace.
Without even knowing the real facts behind the disappearance of Khashoggi, one thing is clear; the rosy halo surrounding the Young Prince in Riyadh has been removed by force.
As long as there are no real hard facts being presented by either the Saudi government, who are claiming not be involved, and the Turkish government, claiming that they have hard facts showing the abduction and killing of Khashoggi, the crisis will continue, opening even more ugly wounds in the coming days. The Khashoggi issue could even lead to a much more dangerous situation than currently is being discussed in the media or by Western politicians or anti-Saudi forces in Qatar, Turkey and Iran.
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The anti-MBS forces are having a field day, as they are able, without a military intervention or assassination, to undermine the position of the Crown Prince significantly.
Already, American Senators, European politicians and Turkish officials, are calling for very harsh measures against the Saudi Kingdom if proof appears of the direct involvement of the Saudi government or members of the Royal Family, including MBS, in the abduction and killing of the journalist.
Blocking potential investments deals or military sales could be already part of the discussions in Washington, London or Brussels. The heat is also on via the international financial sector, which is expected to be heading to Riyadh for the Future Investment Initiative 2018 in 1.5 weeks. A growing list of investors and speakers, such as Virgin Group’s CEO Richard Branson, Uber CEO Khosrowshahi, Los Angeles Times owner Patrick Soon-Shiong, AOL co-founder Steve Case and The Huffington Post co-founder Arianna Huffington, threatening not to attend is a major blow to Riyadh’s dream. More Western CEOs are expected to join this list, putting pressure on Riyadh to act swiftly. Riyadh and MBS will need to quickly address these issues, including opening up its books on Khashoggi. For the long-term, Riyadh’s future will depend on an influx of cash and companies, willing to take part in its future.
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Another spy character, Jack Ryan (Tom Clancy’s Hero), would be a good advisor to MBS at present. The Crown Prince will now need to play on several chess boards at the same time, dealing with Grandmasters in Moscow, Beijing and Delhi to counter Western opposition and to support his own position in the Kingdom, OPEC and regionally. On all sides, the dangers are clear. Most probably MBS is a vivid reader of Clancy too, now trying to mitigate the damage by arranging a turn-to-the-east, which has been extremely quiet in the Khashoggi case.
Still, outside support or contracts will not save the Crown Prince yet. Showing weakness, while his dream, Saudi Vision 2030 and FII2018, is showing cracks could be fatal. He will need to show strength and political hardness. Realism is back in town, soft doctors make stinking wounds.
The threat to MBS’s position, and possibly the King, also will derail ongoing discussions the coming weeks between OPEC and non-OPEC how to deal with the U.S. Sanctions on Iran, the continuing tweets of Trump to produce more oil, and regional instability. If MBS is openly weakened, or being confronted by low success at FII2018, the entire future of the Oil Kingdom is at stake. Internal instability, currently kept under the carpet, will erupt for sure in the open. For the global oil market, this situation is a direct threat to current market stability too. With OPEC’s leading producer, and proponent of the current oil production deal with Russia, weakened or even threatened by regime implosion, the sharks will be hunting very soon. Several OPEC members will not be totally unhappy with the volte face of MBS, as some indicated. An instable Saudi Arabia gives room to maneuver for Iran, Qatar and Venezuela. These three will be looking for any weak point in the Saudi power constellation, as this will weaken the Moscow-Riyadh link too. Khashoggi’s disappearance in Istanbul also brings in Turkey as a player. Erdogan and MBS are not on speaking terms since years, while Iran and Qatar have Ankara in the pocket.
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By Cyril Widdershoven for Oilprice.com
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If it is proven irrevocably that members of the Saudi royal family particularly Crown Prince Mohammed bin Salman were involved in the disappearance and possibly murder of the Saudi journalist Jamal Khashoggi in the Saudi Consulate in Istanbul, the implications for the Saudi family could be horrendous. Not only this will tarnish the image of Saudi Arabia in the world but it will also endanger the stability of the country and the House of Saud itself. This will send oil prices rocketing much higher than $100 a barrel.
To save his throne and the stability of Saudi Arabia, it would not be beyond the realms of possibility if King Salman decided to sacrifice his own son Prince Mohammed bin Salman by stripping him of all his powers and even have him punished.
With the anti-Prince Mohammed bin Salman forces sharpening their teeth, the generational change in leadership when king Salman departs the scene is back at the very forefront of problems facing Saudi Arabia currently.
Still, any measures taken by President Trump to punish Saudi Arabia will be met by retaliations from the Saudi government including the cutting of Saudi production by a sizeable amount to force oil prices up and thus punish President Trump in the mid-term Congressional elections in November. Another measure is that the Saudi could refuse to compensate for any possible loss by Iran oil exports resulting from US sanctions thus undermining the sanctions.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
And I'll add that the world's dependency on oil that is satisfied by many questionable suppliers, coveted by many nations, and with oil revenue going to many questionable uses (like WMD) . . . is the real issue to think about.