Why Saudi Arabia is valuable to Trump

Women gather for a rally and march at Chicago's Grant Park to inspire voter turnout ahead of November's midterm election. Kamil Krzaczynski AFP

Women gather for a rally and march at Chicago's Grant Park to inspire voter turnout ahead of November's midterm election. Kamil Krzaczynski AFP

But Riyadh vowed to hit back on October 14 against any punitive measures as its stock market tumbled, with the fallout from the crisis threatening to imperil Prince Mohammed bin Salman's much-hyped economic reform drive.

But the President all but ruled out cancelling US$110 billion in USA arms sales to Saudi Arabia, arguing that doing so would be "very foolish for our country" and only end up harming U.S. defence industries and others.

The official 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".

The foreign minister of the neighboring island kingdom of Bahrain, Khalid bin Ahmed Al Khalifa, tweeted Sunday night that there should be a boycott of the ride-hailing app both there and in Saudi Arabia.

Trump said the United States competed against China, Russia and other countries for the Saudi contracts and winning it was "a tremendous order for our companies".

People hold signs during a protest at the Embassy of Saudi Arabia about the disappearance of Saudi journalist Jamal Khashoggi, in Washington.

Roger Diwan, a longstanding OPEC watcher at consultant IHS Markit Ltd., said the Saudi comments broke "an essential oil market taboo".

But both the White House and the kingdom are under mounting pressure as concern grows over the fate of the veteran journalist, who hasn't been seen since he entered the Saudi Consulate in Istanbul on October 2.

Saudi Arabia has denied the allegations.

Turkish officials have said they believe Khashoggi - a Washington Post contributor who was critical of Prince Mohammed's policies - was killed inside the mission, and lurid claims have even been leaked that he was tortured and even dismembered.

A Turkish diplomatic source said investigators would inspect the consulate on Monday afternoon, after delays last week when Turkey accepted a Saudi proposal to work together to find out what happened to Khashoggi.

Saudi officials arrived in Turkey on Friday after the two governments agreed to a joint investigation into the case, with Saudi officials granting Turkish investigator access to the consulate building, Reuters reported.

"The U.S.is less dependent on Saudi oil than it used to be, given its domestic shale production and it also exports large amounts of crude oil itself", wrote analyst Fiona Cincotta of City Index in a research note.

And added that five days ago a group tried to visit King Salman saying they were afraid for the future of the al-Saud family, they mentioned Mr Khashoggi's case and they were all put in jail. "He (Trump) will take action".

"The objective of (Sunday's) message broadcasted by the Saudi national media is twofold: one goal is to satisfy the domestic public opinion that Saudi Arabia and its royal family will not be humiliated and the other goal is to send a message to the US", Mitreski, researcher at the University of Sydney, told AFP. SoftBank was down over 7 percent in trading on Tokyo's stock exchange.

Japanese SoftBank's shares also took a dive on Monday, falling by almost seven percent over fears for its major financial ties with Saudi Arabia.

"The withdrawal of top participants from the Riyadh investment conference has also negatively impacted traders' sentiment", he told AFP. But Khashoggi's disappearance, and suspicions he may have been targeted over his criticism of the crown prince, have led several business leaders and media outlets to back out of an upcoming high-profile investment conference in Riyadh.

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