Saudi Arabia Threatens
to Retaliate After U.S. Pressure Over Journalist’s Disappearance
By Margherita Stancati
Updated Oct. 14, 2018 9:11 a.m. ET
Saudi stocks tumble
as investors worry about economic fallout amid worsening ties between the
kingdom and the international community
JEDDAH, Saudi Arabia—Saudi Arabia on Sunday threatened to
retaliate against possible punitive measures a day after President Trump vowed
“severe punishment” if an investigation proves that the kingdom was behind the
suspected death of a prominent Saudi journalist.
The Saudi government said that, in the
event that economic sanctions or other forms of punishment were imposed
on the kingdom, “it will respond with greater action,” according to an official
statement, which didn’t specifically mention the U.S. or any other country.
The statement also warned that the oil-rich kingdom “has an
influential and vital role in the global economy.”
The comments marked Riyadh’s strongest response so far to
mounting international pressure over the mystery surrounding the disappearance
of Saudi journalist Jamal Khashoggi, who was last seen entering the Saudi
consulate in Istanbul on Oct. 2.
Turkish authorities believe Mr. Khashoggi, a government
critic, was killed by Saudi hit men inside the consulate, and claim they have
video and audio evidence to prove it. Saudi Arabia has vehemently denied the
allegation, saying Mr. Khashoggi left the consulate and dispatching a security
team to Turkey to help the continuing investigation.
Despite the denials, the Saudi government remains under
pressure to prove it did nothing wrong.
The Khashoggi episode is causing growing strains between the
monarchy and its most important ally, the U.S.
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Turkey Says Recordings Are Evidence of Saudi
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Mr. Trump, in an interview with “60 Minutes,”
said he would be “very upset and angry” if the allegations prove true, and vowed there would be consequences. But he also
said he opposed sanctions against the U.S. ally because it may hurt jobs in the
U.S. tied to a $100 billion arms deal with the kingdom.
Capitol Hill has been pressuring the Trump administration to
rethink its close partnership with the Saudi leadership in
light of Mr. Khashoggi’s suspected killing. Bipartisan lawmakers have
raised the possibility of halting arms sales and of imposing economic sanctions
on the kingdom.
Saudi stocks tumbled Sunday as investors worried about the
impact on its economy from worsening relations between the kingdom and the U.S.
The Riyadh-based Saudi Stock Exchange’s benchmark Tadawul All Share Index
closed 3.5% lower, after falling nearly 7% at one point in the session.
Write to Margherita Stancati at margherita.stancati@wsj.com