Middle East Oil Wars: Saudi Arabia’s Decline and China’s Rise

Oil wars will destroy Saudi Arabia & Russia & China dominate

Middle East Oil Wars: China, Russia, and Iran Reshaping Eurasia

Updated May 2023

Buckle up; 2015 promised a geopolitical whirlwind, with China, Russia, and Iran challenging what I’ve termed the “Empire of Chaos.” This year would see significant moves toward Eurasian integration, gradually diminishing the hegemony of the US dollar, especially the petrodollar.

Despite formidable challenges, China exuded confidence as an emerging commercial superpower. President Xi Jinping and his administration invested heavily in urbanization and anti-corruption efforts. On the international stage, China accelerated its ambitious “Silk Roads” project, both overland and maritime, aiming to unify Eurasia through trade and commerce.

Amidst this, global oil prices remained low, and the fate of a nuclear deal between Iran and the P5+1 was uncertain. If sanctions persisted, Iran was poised to further integrate with Asia rather than the West. The geopolitical landscape was evolving, with these key players asserting their influence and reshaping the Eurasian terrain.

Western Sanctions and the Oil Price Collapse: Targeting Iran and Russia

Western sanctions have been a significant factor in the geopolitical landscape, particularly concerning Iran and Russia. The United States has recognized that achieving a comprehensive deal with Iran relies on Russia’s cooperation. Such an agreement would represent a notable foreign policy success for the respective administrations involved. However, it is worth noting that Iran and Russia have faced Western sanctions, which have had significant implications for their economies and global relationships.

The ongoing financial and strategic collapse of oil prices has also played a role in targeting Iran and Russia. The decline in oil prices has had a direct impact on the economies of these countries, as both heavily rely on oil exports for revenue. The collapse in oil prices has put pressure on their economies, affecting their fiscal stability and overall geopolitical influence.

It is essential to consider that the dynamics of Western sanctions and the oil price collapse are complex and multifaceted. They involve various geopolitical considerations, economic factors, and strategic interests. The interplay between these elements shapes the relationships between Western nations, Iran, and Russia and has broader implications for global politics and energy markets.

 

Middle East Oil Wars: Shifting Power Dynamics

Now, let’s take a look at Russian fundamentals. Russia’s government debt totals only 13.4% of its GDP. Its budget deficit in GDP is only 0.5%.  Assuming a US GDP of $16.8 trillion (the figure for 2013), the US budget deficit totals 4% of GDP versus 0.5% for Russia. The Fed is essentially a private corporation owned by regional US private banks, although it passes itself off as a state institution. The US publicly held debt equals a whopping 74% of GDP in the fiscal year 2014. Russia’s is only 13.4%.

The declaration of economic war by the US and EU on Russia – via the run on the ruble and the derivative oil attack – was essentially a derivatives racket. Derivatives – in theory – may be multiplied to infinity. Derivative operators attacked the ruble and oil prices to destroy the Russian economy. The problem is that the Russian economy is more soundly financed than America’s.

This swift move was conceived as a checkmate, so Moscow’s defensive strategy was not bad. On the key energy front, the problem remains the West’s – not Russia’s. If the EU does not buy what Gazprom offers, it will collapse. Moscow’s fundamental mistake was to allow Russia’s domestic industry to be financed by external, dollar-denominated debt. Talk about a monster debt trap which the West can easily manipulate. The first step for Moscow should be to supervise its banks closely. Russian companies should borrow domestically and move to sell their assets abroad. Moscow should also consider implementing a system of currency controls so the basic interest rate can be brought down quickly. Full Story

Another exciting take on the situation is that it’s certainly not an open and closed case like the USA and EU are making it look like.

Impact of Middle East Oil Wars on the U.S.: A Closer Look

The current situation involving the U.S., Saudi Arabia, and Russia raises significant concerns. It’s a complex dynamic where a country known for human rights violations, Saudi Arabia, and the U.S. seem to be targeting Russia, a more liberal and modern nation.

The strategy appears to be flooding global oil markets to undermine Russia’s economy and weaken Putin’s popularity. However, the plan may backfire. Putin remains popular in Russia, and the Russian people are unlikely to blame him for economic troubles caused by external factors. The provocative actions of NATO and military tensions further solidified Russian unity.

Moreover, the recent near-collapse of the banking system in the U.S. and EU, masked by central bank interventions, highlights the fragility of the global financial system. The stability of this system depends on world trade, and China’s role in maintaining the strength of the euro and dollar cannot be ignored. As China continues to bolster its domestic economy, the global economic landscape is shifting, with the U.S. no longer holding the title of the world’s largest economy. The outcome of these complex geopolitical and economic manoeuvres remains uncertain.  Full Story

 

Saudi Arabia’s Risky Gamble in Middle East Oil Wars

Saudi Arabia finds itself in a precarious situation as it embarks on a new conflict, this time not against weaker nations like Iraq, Libya, or Iran, but against Russia. Unlike previous opponents, Russia can respond with overwhelming force or support groups like the Houthis to create chaos within the kingdom.

The ongoing challenge of dealing with the Houthis in Yemen adds to Saudi Arabia’s vulnerabilities. If the Houthis were to receive substantial external support, it could pose a significant threat to the House of Saud.

China and Iran aligning with Russia further complicates the situation. Saudi Arabia’s reliance on indefinite U.S. support may prove unreliable in the face of these shifting alliances. In the end, this alliance with the U.S. might become a decision that the House of Saud regrets.

Originally Published on: Sep 23, 2016; Updated Over the Years with the Latest Update Done in May 2023

Other news

How Did Many Banks Fail Consumers in the Stock Market Crash of 1929?

How Did Many Banks Fail Consumers in the Stock Market Crash of 1929?

Mar 28, 2024 How Did Many Banks Fail Consumers in the Stock Market Crash of 1929: Examining the Economic Fallout ...
US Rising Food Prices:

US Rising Food Prices: Analyzing FOMO and Other Market Dynamics

March 28, 2024 Navigating US Rising Food Prices: Unraveling FOMO and More We're expanding on numerous comments from the General ...
How to define financial freedom in 5 years?

Mastering Elegance in Economics: How to Define Financial Freedom in 5 Years

Mar 28, 2024 In a world where economic stability seems as elusive as ever, the quest for financial freedom has ...
how to define financial freedom?

How to Define Financial Freedom and Attain Opulence

Mar 26, 2024 How to Define Financial Freedom and Attain Opulence To define financial freedom in tangible terms, one might ...
what is a fed pivot

Deciphering Elegance in Economics: What is a Fed Pivot?

Mar 26, 2024 Deciphering Elegance in Economics: What is a Fed Pivot? Few acts in the grand theatre of economics ...
What is Contrarian Thinking:

What is Contrarian Thinking: Unlocking Its Great Benefits

What is Contrarian Thinking: Unveiling Its Remarkable Benefits March 26, 2024 In a world that often rewards conformity and echoes ...
What is an ETF for Dummies? Everything you need to know

What is an ETF for Dummies? Unlocking Strategic Insights

What is an ETF for Dummies? Simplifying Winning Strategies March 25, 2024 Introduction: In the words of the great philosopher ...
Market Psychology and Crowd Dynamics:

Market Psychology and Crowd Dynamics: Adapt, Adjust or Vanish

The Enigma of Market Psychology and Crowd Dynamics: Adapt, Adjust or Vanish March 24, 2024 In the ever-shifting tides of ...
How to Achieve Financial Freedom in 5 Years: A Strategic Plan

Five-Year Freedom Blueprint: Empower Your Journey to Liberty

Master Your Wealth: How to Achieve Financial Freedom in 5 Years March 24, 2024 In today's fast-paced world, financial freedom ...
how social media manipulates your mind?

Digital Puppeteers: Unveiling How Social Media Manipulates Your Mind

Mar 22, 2024 In the modern age, social media has become dominant in shaping public opinion and manipulating collective consciousness ...
can you lose money selling covered calls

The Myth Debunked: Can You Really Lose Cash with Covered Calls?

Mar 22, 2024 Introduction In the journey toward financial freedom, empowerment is not just a buzzword; it's the cornerstone of ...
Financial Freedom Awaits and Exploring Top Personal Loans for Debt Consolidationl fast techiques

Financial Freedom Awaits And Exploring Top Personal Loans for Debt Consolidation

Financial Freedom Awaits: Exploring Top Personal Loans for Debt Consolidation March 22, 2024 Are you feeling overwhelmed by multiple debts ...
Discover elegant strategies to achieve financial freedom

Empowerment: Unleash Your Potential: A Bold Guide to Achieving Financial Freedom

Mar 21, 2024 Introduction The journey to achieve financial freedom is as much about empowerment as economics. It's a quest ...
Warren Buffett Investment Tips Unveiled

Warren Buffett Investment Tips for Beginners: Unveiled

Warren Buffett's Investment Tips: Sage Advice for Success March 21, 2024 One of the best investors of all time is ...
What is Market Psychology: Deciphering its Trading Impact

Unraveling Market Psychology: Impact on Trading Decisions

What Is Market Psychology: Its Impact On Investing March  20, 2024 The world of finance and trading can be a ...