The oil market is on edge after Saudi Arabia issued a combative statement that some are interpreting as a veiled threat to wield crude as a weapon in the ongoing scandal over missing dissident Jamal Khashoggi.
The question is whether Saudi Arabia — the world's largest oil exporter, a close ally of President Donald Trump and the de facto leader of OPEC — would take that extraordinary step, one it has not taken since the Arab oil embargo of 1973-1974.
To be sure, the current leadership in Riyadh is facing unprecedented scrutiny over allegations that the kingdom ordered the abduction of Khashoggi, a Saudi journalist and Washington Post columnist. Turkey says it believes that Saudi agents detained and killed Khashoggi at the kingdom's consulate in Istanbul. Saudi Arabia denies those claims.
The scandal has caused businesses, influential individuals and media companies to drop out of this month's Future Investment Initiative, a conference in Riyadh meant to attract investment in the kingdom. The United States and European nations have threatened punishment if Saudi Arabia is found to be behind Khashoggi's alleged murder.
That has caused Saudi Arabia to react forcefully. Here's why Riyadh's response is roiling the oil market.