Will Saudi Arabia's Use of Oil as a Weapon Against the West Yield Results?

It is unlikely that Saudi Arabia will use "oil as a weapon" in the diplomatic crisis surrounding the disappearance of Jamal Khashoggi, the Saudi critic journalist. The experience of 1973 and 1974, when Saudi Arabia attempted to use oil sales as a diplomatic tool, showed that this method does not yield results and that the country itself would be the biggest victim of such a policy. Despite the harsh rhetoric from Saudi media, it is improbable that the government will reduce oil production for its own interests and seek to raise prices. The aggressive slogans from Riyadh's media should be seen as a means to attract public opinion rather than a serious threat. For example, the Al Arabiya network announced on October 14: "Sanctions by the U.S. mean stabbing itself. Riyadh is the global oil capital, and any action against it will lead to an increase in oil prices." The site added in a threatening tone: "If an $80 per barrel price has angered the U.S. President, no one should dismiss the possibility of oil prices reaching $100 or $200, or even double that." The reactions from Saudi officials have been more cautious, but they too have warned that any punitive action will be met with a stronger retaliatory response. In October 1973, Saudi Arabia and other Arab oil-producing countries announced that they would reduce their production by five percent each month until Israeli troops withdrew from Arab-occupied territories. Additionally, they halted oil sales to the U.S. and several other countries. As a result of this action, the oil market, which had seen significant production cuts in previous decades, became extremely turbulent, and oil prices surged. Saudi Arabia and other countries profited handsomely in the short term, but the policy of using oil as a weapon ultimately failed. Israel never withdrew from the occupied territories, the U.S. did not stop its support for Israel, and oil prices fell after a few months, leaving a severe negative impact on the economies of oil-producing countries that lasted until the 1990s. One of the most important outcomes of this embargo was the increase in oil production in other countries, including the U.S., the Soviet Union, China, and North Sea oil. At the same time, most developed countries significantly reduced their dependence on oil, at least in terms of heating and electricity production. The use of natural gas and coal increased, and the construction of a new generation of nuclear power plants began. Simultaneously, industrial countries enacted new regulations to reduce the reliance of the transportation sector and vehicles on oil products. As a result of all these changes, oil prices did not see a significant jump until the end of the 1990s, which had a severe negative impact on the economies of Arab oil-producing countries. The use of oil as a weapon and diplomatic tool will not yield results, and for this reason, it is unlikely that Saudi leaders will resort to it in the diplomatic crisis surrounding Jamal Khashoggi's disappearance. In the short term, Saudi Arabia may benefit more from rising oil prices relative to its reduced production. However, rising oil prices will weaken the global economy and reduce consumption, potentially leading to a recession in the oil market within a year. Moreover, this weapon cannot be used selectively against one or a few countries because the oil market is fully integrated and global. Using oil as a weapon to pressure the U.S. will also raise prices for China and India, which are larger buyers and will play a more significant role in the oil market in the future. In recent decades, Saudi Arabia has sought to establish itself as a stable and reliable oil producer. Using oil as a weapon would destroy this credibility. Saudi customers are likely to turn to Russia, Iran, and the U.S. and reconsider their long-term reliance on Saudi oil. If Saudi Arabia uses oil as a weapon, many countries will attempt to reduce their oil consumption in various ways, similar to the consequences of the 1973 oil embargo, which will ultimately lead to decreased demand and oil prices. A sudden increase in oil prices will accelerate the production and use of electric vehicles and reduce reliance on oil products, just as occurred in the 1980s regarding heating and electricity production. Saudi Arabia's success in oil production and sales over the past decade has been the result of an unwritten agreement between ensuring "demand security" from buyers and "production security" from Saudi Arabia. Using oil as a weapon would disrupt this agreement. Finally, it should be noted that Saudi Arabia is militarily and security-wise dependent on advanced weapon systems, training, intelligence, and the deployment of U.S. troops and aircraft carriers in the region. For this reason, Riyadh cannot go to war with the U.S. using oil as a weapon, as it would jeopardize the foundations of the two countries' relations and make Saudi Arabia vulnerable to threats from regional rivals, including Iran. For all the reasons outlined, using oil as a weapon is futile, and the country that employs it is likely to suffer the most. Therefore, it is unlikely that Saudi Arabia will adopt such a method.