At a time when many countries are finally trying to reduce their reliance on fossil fuels, the world is suddenly awash in oil and gas discoveries. But for the countries with the newest finds, many of them in Africa and South America, mineral wealth may not be the bonanza it was in decades past.
On December 1, Saudi Arabia officially assumed the presidency of the G-20. The task of leading the high-profile economic forum, which rotates annually among member countries, is usually more a matter of form than of substance. But for Saudi Arabia—the group’s only Arab member—the stakes are high.
To understand geopolitics we need to understand power, which in turn derives from the perception of national wealth. The way nation-states use their wealth to defend their interests helps to shape our perception of their place and their role in the world. Soil resources are among the most important elements of wealth. But it is the human being who evaluates those elements — as such, the human resource is superior to them.
The American fracking for oil and natural gas boom will continue on through the 2020s. And why not? Since fracking took off in 2008, the U.S. has more than doubled our proven oil reserves to ~65 billion barrels. Natural gas reserves have surged over 80% to ~430 trillion cubic feet. Already the largest oil and gas producer, the U.S. is set to increase its share of ~17% of global oil production and ~23% of gas. In the 2020s, the U.S. is set to supply over 60% of new oil and gas.
The two most important facts about Aramco are now directly in tension with one another. It has been central to the power of the House of Saud precisely because the royal family has had it under tight control. At the same time, Crown Prince Mohammed bin Salman has made it central to his plan to transform the country, known as Vision 2030, by promising to sell shares of the company to investors—thus giving them greater control over it.
During the late June 2019 crisis in the Persian Gulf, the American president made a startlingly candid observation (even by his standards): “China gets 91 percent of its oil from the Straight (sic), Japan 62 percent, and many other countries likewise. So why are we protecting the shipping lanes for other countries (many years) for zero compensation. All of these countries should be protecting their own ships …”
U.S. dependence on foreign oil has shifted. Thus, America’s interests are no longer as vulnerable to negative events in the Middle East as they were in 1980.
On the occasion of his visit to Saudi Arabia, his second in three years, India’s Prime Minister Narendra Modi said that the two countries have been working together within the G20 to reduce inequality and promote sustainable development.
Modi said with the signing of an agreement on a Strategic Partnership Council, already robust and deep bilateral ties in various fields will only strengthen further. Saying stable oil prices are crucial for the growth of the global economy, he praised the Kingdom’s role as an important and reliable source of India’s energy requirements.
Also Read: MBS’s Reform-Driven Saudi Offers India Room To Strengthen Bilateral Ties
Between US President Donald Trump’s zero-sum disputes with China and Iran, UK Prime Minister Boris Johnson’s brinkmanship with Parliament and the European Union, and Argentina’s likely return to Peronist populism, the fate of the global economy is balancing on a knife edge. Any of these scenarios could lead to a crisis with rapid spillover effects.
Almost immediately after the attack on a major Saudi Aramco oil production facility in Abqaiq, the first fingers were pointed at Iran…As Saudi oil production halved and U.S. gasoline prices spiked, President Donald Trump raised the stakes. He warned that the United States was “locked and loaded” following identification of the perpetrator. This led numerous outlets to claim that a U.S.-Iran war is likely or even inevitable. Fortunately, there are five reasons why it’s not.
