Saudi Crown Prince Mohammed Bin Salman has warned of a “total collapse” of the global economy due to ongoing tension with Iran. Speaking in an interview with CBS yesterday, the crown prince known, known colloquially as MBS, predicted a future in which oil prices skyrocketed due to the chaos and instability sparked by US President Donald Trump’s unilateral withdrawal from the Iran nuclear deal.
Trump followed his decision to withdraw from the 2015 deal singed under his predecessor Barack Obama with crippling sanctions, promoting accusations of abandoning his European allies, and two other parties to the deal, China and Russia. Trump’s alternative policy was ratchet up tension with Iran through what he called a “maximum pressure” campaign against Tehran. The hostile move plunged the region into a series of crises that escalated in the attack on Saudi oil facilities over two weeks ago, which the US Secretary of State Mike Pompeo duly called an “act of war”.
In the interview with CBS, which was recorded prior to a devasting attack on Saudi forces by the Houthi rebel group over the weekend, MBS warned that the standoff with Iran would have severe consequences. “The region represents about 30 per cent of the world’s energy supplies, about 20 per cent of global trade passages, about 4 per cent of the world GDP. Imagine all of these three things stop,” he said. “This means a total collapse of the global economy, and not just Saudi Arabia or the Middle East countries.”
The crown prince also speculated skyrocketing oil prices. “If the world does not take a strong and firm action to deter Iran, we will see further escalations that will threaten world interests. Oil supplies will be disrupted and oil prices will jump to unimaginably high numbers that we haven’t seen in our lifetimes,” he said.
The CBS interview, which was aired yesterday, coincides with the anniversary of the murder of Saudi journalist Jamal Khashoggi. During the interview, MBS denied ordering Khashoggi’s murder but said he took “full responsibility as a leader in Saudi Arabia especially as it was committed by individuals working in the Saudi government”. MBS is desperate to clear his name in order to attract global investors for his vision to modernise the kingdom.
The cloud of suspicion that hangs over MBS is ,however, only half of Riyadh’s problem. Bin Salman also unleashed a disastrous war on Yemen in 2015 against Houthi rebels allied to Iran. The campaign was expected to end quickly but instead the Saudis have been bogged down in a conflict described by some as its “Vietnam”. The war also plunged the Arab world’s poorest state into what the UN has described as the world’s worst man-made humanitarian crisis, with more than ten million people pushed to the brink of famine.