Home Politics The Khashoggi Crisis May Finally Be Affecting Oil Prices

The Khashoggi Crisis May Finally Be Affecting Oil Prices

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The Khashoggi crisis will start to influence oil prices. According to CNBC, the CIA is expected by Tuesday to show President Donald Trump the evaluation that links the Saudi crown prince to the death of Khashoggi, a Saudi journalist. The market is still dubious that the death of the U.S. resident Khashoggi will affect the Saudi supply.

Despite shifting of stories multiple times, the steadiest aspect of their stories is the claim that Mohammed bin Salman had no hand in the murder of Khashoggi. The Foreign Minister of Saudi Arabia, Adel al-Jubeir, stated that the crown prince has nothing to do with the issue.

What Happened to Jamal Khashoggi?

Jamal Khashoggi, a 59-year old Washington, DC resident, is a journalist who was critical of the Saudi government. He was reported missing since October 2 by his fiancée after waiting for him for several hours. The last time the Washington Post columnist was spotted was at the main entrance of the Saudi Arabian consulate in Turkey.

The journalist was still missing as of October 15 and a Turkish forensic group decided to visit the Saudi consulate to search for evidence. The next day despite Saudi leaders deliberately denying the accusation, a high-level Turkish official revealed proof that Khashoggi was killed there.

In the face of hindering the investigation for almost three weeks, the moment of truth emerged on Oct 20. Saudi Arabia, finally acknowledged that the well-known journalist and critic of the Saudi government was tortured and killed in the consulate. On October 23, Turkish Presidents Erdogan announced that those individuals involved in the killing should be tried in Turkey. Noted by Washington Post and NBC News, the assessment determines that Mohammed bin Salman, the Saudi Crown Prince, commanded Saudi agents to do the slaying.

“Appropriate actions” against the suspects would be rendered, Mike Pompeo, the Secretary of the U.S. State who’s said to visit the area to deal with the fallout from the case, cited. A press release on Thursday, Saudi public prosecutor mentioned that out of 21 individuals that had been detained, 11 suspects had been charged in the death of the journalist. He also emphasized that he had demanded the death penalty for the five of them. Their names remain unknown.

Global Oil Policy

Major oil manufacturers together with OPEC and Russia are expected to meet in Vienna, Austria. The group is considering a renewed round of production cuts after coordinating oil policy since 2017. This is the reason why US President Trump considered supporting Saudi Arabia and continues to cast doubt on the royal’s role in the murder, in efforts to prevent financial pain in the U.S. from new oil supply caps.

The oil deliveries typically take six to seven weeks to touch U.S. coasts. By 2019, it’s estimated that OPEC and its allies may expurgate output by approximately 1 million bpd. Also, as per Saudi energy minister Khalid Al-Falih, Saudi Arabia’s oil consignments would fall by 500,000 barrels per day in December.

Cutting Oil Output

Cutting oil cargos to the US is an approach that increases prices and may enrage Trump, and Saudi Arabia started to load fewer barrels on ships bound for the United States since this November. The trend has been observed since last year, and the persistence of this action could ignite a new conflict with the U.S. government. It’s believed that the U.S. oil imports from the Middle East might reach the lowest points on record.

As per the global head of commodity strategy at RBC Capital Markets and a former intelligence analyst for the Central Intelligence Agency Helima Croft, the kingdom of Saudi Arabia will safeguard its economic benefit and will pursue the output cuts, instead of letting oil costs to slide down even more.