Arabs realigning with China, Russia to affect US allies' energy market
The Sino-Russia alliance with West Asia could have an effect on the US allies' energy market, an American investor suggested.
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West Asia realigning with China, Russia to affect US allies' energy market
The West Asian nations realigning with China and Russia will have an impact on US allies' energy markets, according to American investor Jim Rogers.
"It'll have some effect, not immediately, not even this year or next year. But you know, you have the Arabs become more friendly with the Chinese or the Russians or somebody else. Obviously, that's going to have a big effect on where their energy goes, and their pricing and their effect on the West," Rogers, the founder of the Rogers International Commodity Index (RICI), said.
America is now fairly self-sufficient in terms of energy, he added, but many US allies will be affected. "Many of Americas’ friends will have to get energy somewhere if the Saudis become enemies of the US. Then obviously America's friends will have to get energy somewhere else," he said.
In response to global energy market uncertainty, OPEC+ unanimously agreed in October to withdraw 2 million barrels of oil per day beginning in November. The decision sparked outrage in the White House, which announced that it will reconsider its relationship with Saudi Arabia in light of its decision to support the OPEC+ decision.
After considering further cuts, the OPEC+ alliance decided last week to maintain current oil production quotas. "Throughout history, no matter how close some countries have been, those relationships often change," Rogers said.
Moreover, Western countries have been struggling to replenish their gas reserves in time for the heating season as a result of sanctions imposed on Russia. The conflict caused significant disruptions in supply chains and a spike in global energy prices.
The G7 states and some allies imposed a $60 per barrel price cap on Russian crude last week in an effort to limit earnings that Moscow could use to allegedly fund the military operation in Ukraine.
The price cap is unacceptable, according to the Kremlin, and Russia will not sell oil to any country that tries to implement it.
On the other hand, Russian President Vladimir Putin said the price cap on Russian oil, proposed by the West weeks ago, corresponds to the current oil prices, and it does not affect Russia.
"The proposed cap corresponds to the prices at which we sell today. In this sense, this decision does not affect us in any way. To be honest, it is not important for us," Putin said at a press conference following his visit to Kyrgyzstan.
It is worth noting that the number of oil tankers stuck in Turkey's Black Sea Straits is subsiding, Bloomberg reports, citing a shipping official familiar with the situation.
According to a report by Bloomberg citing officials, the number of oil tankers stranded in Turkey's straits in the black sea is decreasing.
Turkey's maritime authority announced that at least 18 tankers filled with 2 million tons of oil were stuck in the Black Sea on the way to the Mediterranean due to insurance issues following the price cap imposed on Russian oil by Western states.
