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“If U.S. sanctions are imposed on Saudi Arabia, we will be facing an economic disaster that would rock the entire world,” according to one heated editorial.

“Riyadh is the capital of (global) oil and touching this would affect oil production before any other vital commodity,” the editorial warned.

If the price of oil reaching US$80 a barrel angered U.S. President Donald Trump, “no one should rule out the price jumping to US$100, or US$200, or even double that figure,” the author said bluntly.

The government’s official response has been more circumspect but it nonetheless warned that it would respond to any action with even greater retaliation and pointed to the kingdom’s “influential and vital role in the global economy.”

Oil Embargo

In October 1973, Saudi Arabia and the other Arab oil producers announced that they would start cutting production by 5 per cent per month until Israeli forces evacuated from occupied Arab territories.

In addition, Saudi Arabia and the other Arab producers announced an embargo on oil sales to the United States and a number of other countries.

Global oil supplies had already become tight even before the decisions to cut production and embargo the United States, mostly as a result of low real prices during the 1950 and 1960s.

Spare production capacity in the United States, which had been as much as 4 million barrels per day in 1968, had been used up by March 1972.

In this context, the production cuts and embargo made an already tight market worse, sent oil prices surging, and produced a huge, short-term revenue windfall for Saudi Arabia and other oil producers.