Oil market weighs U.S.-Saudi rift

Crude oil prices are up Monday after the weekend's escalating rhetoric between the U.S. and Saudi Arabia over the disappearance — and apparent killing — of Jamal Khashoggi.

Between the lines: Traders don't appear convinced at this point that the rupture will cause major upheaval in oil flows. Prices for the benchmark Brent crude are higher but they're not soaring.

• At the time of publishing, prices were up 44 cents for WTI and 81 cents for Brent.

Why it matters: Saudi Arabia is the world's largest crude oil exporter and, along with the U.S. and Russia, one of the world's biggest producers. Any Saudi effort to use oil as a geopolitical weapon would rattle global oil markets and put sharp upward pressure on prices that are already near four-year-highs.

Driving the news: Over the weekend President Trump said there would be "severe punishment" if the Saudis killed Khashoggi.

• In response, the Saudi's released a statement warning, "if it receives any action, it will respond with greater action, and that the Kingdom's economy has an influential and vital role in the global economy."
• And on Sunday, the general manager of Saudi-owned Al Arabiya News Channel, Turki Aldakhil, published a column warning that U.S. sanctions could send oil prices to $100 per barrel, $200 or even higher.

The latest: In remarks in India this morning, Saudi energy minister Khalid al-Falih emphasized the kingdom's role as a reliable global supplier.

• However, he also said that absent the Saudis' development and deployment of their spare production capacity, prices would be in the triple digits.
• “We expect and demand that Saudi Arabia’s efforts be appreciated and acknowledged,” al-Falih said at an livestreamed energy conference there.

Go deeper:

• Sorting out Saudi: Big business, hypocrisy and justice.
• Companies back away from Saudi business over missing journalist.
• Reality bites Saudi Crown Prince Mohammed bin Salman.