The government of Saudi Arabia on Sunday denied any involvement in the disappearance of Washington Post contributing journalist Jamal Khashoggi and warned that any sanctions against the oil-rich kingdom would be met with "greater action" and possible exploding oil prices.
"The kingdom affirms its total rejection of any threats and attempts to undermine it, whether by threatening to impose economic sanctions, using political pressures, or repeating false accusations," the government said in a statement released in Saudi media. "The Kingdom also affirms that if it receives any action, it will respond with greater action."
The warning came after President Donald Trump warned that Saudi Arabia could face "severe punishment" over Khashoggi, feared murdered after entering the Saudi consulate in Istanbul, Turkey, on Oct. 2.
Trump's warning dealt a gut punch to the Saudi stock market, which crashed 7% on Sunday before recovering some of the losses to close down 3.5%.
The kingdom's statement warned that the Saudi economy plays an "influential and vital role" in the global economy. Only Russia produces more oil than does Saudi Arabia.
Turki Aldakhil, who leads the Saudi-controlled Al Arabiya Television News Network, warned Sunday that U.S. sanctions could ignite an "economic disaster that would rock the entire world."
"If the price of oil reaching $80 angered President Trump, no one should rule out the price jumping to $100, or $200, or even double that figure," Aldakhil wrote in an opinion piece. He added that the fallout could drive "the entire Muslim world into the arms of Iran."
Trump, however, has sent a mixed message. In a Saturday afternoon news conference in the Oval Office, the president said "we would be punishing ourselves" by canceling an arms sales deal with Saudi Arabia. He said the U.S. was competing against China and Russia for the $110 billion deal.
Saudi Arabia has worked to diversify its economy by luring foreign investment. The kingdom hosts its three-day Future Investment Initiative forum later this month. Dubbed "Davos in the Desert," the forum draws government and financial leaders from around the world. Some are dropping out as concerns over Khashoggi's fate rise.
The president said he planned to speak with Saudi King Salman soon, adding that he also plans to meet with Khashoggi’s family. Trump also confirmed reports that Turkey claims to have audio and video of Khashoggi’s killing. The president said he had not seen or heard the recordings but planned to "soon."
Khashoggi, a Saudi native and fierce critic of the Saudi ruling family, was living in self-imposed exile when surveillance footage showed him entering - but not leaving - the Saudi consulate. Khashoggi reportedly had sought paperwork needed to marry his Turkish fiancée.
The kingdom has vehemently denied killing Khashoggi but has provided no explanation for his disappearance. Reports of Khashoggi's possible murder have touched off a firestorm of accusations, criticism and political tension between the U.S. and its strongest ally in the Middle East.
Contributing: Christal Hayes