Global Alliances are Changing… Here’s What it Means For The Current World Order
The comments below are an edited and abridged synopsis of an article by Craig MacIntosh
Saudi Arabia’s King Salman bin Abdulaziz has approved a Memorandum of Understanding that grants the Kingdom the status of dialogue partner in the Shanghai Cooperation Organization.
In 2021, following the withdrawal of US troops from Afghanistan, there were two countries to focus on: Saudi Arabia and Taiwan, because both relied on US protection for their safety. Less than a month after the US withdrawal from Afghanistan the Saudis struck a deal with Russia, moving rapidly to secure their new military partner. Their main economic partner is now China.
This is a war fought on multiple fronts. As the West attempts to destroy demand for oil, OPEC fights back. OPEC announced a surprise oil production cut of more than 1 million barrels a day, abandoning previous assurances that it would hold supply steady and posing a new risk for the global economy.
Meanwhile, Iraq cut oil production by 211,000 b/pd, Kuwait cut by 128,000 b/pd, Oman cut by 40,000 b/pd, the UAE cut by144,000 barrels, and Russia cut by 500,000 gallons, all until year end.
In total, we’re looking at over 1.5m b/pd coming off market.
Then there’s India, which was the biggest buyer of Russia’s oil in March. Deliveries to India will account for more than 50% of all seaborne oil exports this month, with China in second place. By the way, Russian sales of crude to India jumped 22x last year.
The non-Western bloc holds some 70% of the world’s crude oil reserves, 80% of natural gas reserves, and 43% of coal reserves (probably a lot more given that China has Indonesian coal wrapped up).
The sanctions on Russia may well backfire on the West in ways they never imagined, while US shale peaking out will just add fuel to the fire!