Saudi says won’t repeat 1973 oil embargo

Saudi Arabia’s energy minister said on Monday that the kingdom had no intention of repeating the 1973 oil embargo amid the threat of sanctions on the kingdom.

US senators have argued for the imposing of sanctions on the kingdom in recent days in response to the killing of journalist Jamal Khashoggi inside the kingdom’s consulate on October 2.

In turn, Saudi Arabia said last week that it would reject any economic sanctions or political pressure from the international community over the incident, which it had described as being carried out by a rogue Saudi security team.

The statement went on to promise if the kingdom receives any action “it will respond with greater action”, noting its “influential and vital role in the global economy”, an apparent reference to its position as the world’s largest oil exporter.

Read: Saudi says won’t bow to political pressure, threatens response to any sanctions

Energy minister Khalid Al-Falih told Russia’s TASS news agency on Monday that “there is no intention” of repeating the 1973-1974 oil embargo against the United States, which was enacted by OPEC in response to a US decision to re-supply the Israeli military.

“This incident will pass. But Saudi Arabia is a very responsible country, for decades we used our oil policy as responsible economic tool and isolated it from politics,” he was quoted as saying.

“My role as the energy minister is to implement my government’s constructive and responsible role and stabilizing the world’s energy markets accordingly, contributing to global economic development.”

Falih further stated that an increase in oil prices would slow down the global economy and trigger a recession. However, he said there was no guarantee prices won’t rise in response to the return of US sanctions on Iran next month.

Brent crude prices have risen nearly 40 per cent over the last 12 months to over $80 a barrel due to supply concerns linked to falling Iranian crude exports and disruptions to supply in Libya, Nigeria and Venezuela.

“I cannot give you a guarantee, because I cannot predict what will happen to other suppliers,” Falih said of whether a return to $100 a barrel was likely.

“If 3 million barrels per day disappears, we cannot cover this volume. So we have to use oil reserves,”

He added that the kingdom would soon raise output to 11 million barrels per day from 10.7 million and the country had the capacity for a further increase to 12 million bpd.

Neighbouring the UAE could also add another 0.2 million bpd, he said.