Saudi Arabia warned on Sunday that it would retaliate against any sanctions imposed on the oil-rich kingdom over the disappearance of journalist Jamal Khashoggi, as the Riyadh stock market plunged on growing investor jitters.
From tech tycoons to media giants, a host of Western companies are now distancing themselves from the Gulf state, imperilling Crown Prince Mohammed bin Salman’s much-hyped economic reform drive.
US President Donald Trump threatened ally Saudi Arabia on Saturday with “severe punishment” if Khashoggi, who has been critical of Prince Mohammed, was killed inside its Istanbul mission.
Amid the circling storm, Riyadh vowed to hit back against any punitive measures taken against it.
“The kingdom affirms its total rejection of any threats or attempts to undermine it whether through threats to impose economic sanctions or the use of political pressure,” an official source said, quoted by state news agency SPA.
He said Riyadh would “respond to any action with a bigger one”, pointing out that the oil superpower “plays an effective and vital role in the world economy”.
According to Saudi-owned Al Arabiya, the kingdom has “over 30 measures” that it could implement to combat sanctions.
These measures include using sales of oil and arms, exchange of information between Riyadh and Washington, and a possible reconciliation with regional arch-rival Iran said the report.
As investors took fright, Saudi stocks tumbled by around seven per cent at one point on Sunday, wiping out their gains for 2018.
Business barons including British billionaire Richard Branson and Uber CEO Dara Khosrowshahi, as well as media powerhouses like Bloomberg and CNN, have pulled out of next week’s Future Investment Initiative (FII) in Riyadh, dubbed “Davos in the desert”.
Khashoggi, a Washington Post contributor, vanished after entering the consulate on October 2.
While Turkey stepped up pressure on Saudi Arabia by accusing the kingdom of failing to cooperate with a probe into the journalist’s disappearance, the Kingdom insists Khashoggi left the building safely and dismissed accusations that authorities had ordered his murder by a hit squad as “lies and baseless allegations”.