The Great Energy Pivot: Rewriting the Oil Trade [Part IV]

Last time, I detailed the potential of an American oil cartel.

It roughly aligns with the left-field idea put forward by geopolitical analyst Pippa Malmgren.

As a recap, she believes the international system is a shifting triangle centred on three key players: the US, China, and Russia.

I tend to agree.

And according to Malmgren, this triangle is about to undergo a major shift.

It started to move into motion back when Russia was isolated from the global economy in its war with Ukraine.

That’s effectively forced Russia to lean heavily on China for its economic existence.

As an oil and gas-dependent nation, this has suited China very well, especially in light of what’s occurred in the Middle East.

But since the conflict began between Russia and Ukraine, Malmgren believes Beijing has gained de facto control over large swathes of Russian territory and resources.

In her eyes, she believes Russia has ‘given up’ its autonomy to China.

In simple terms, Russia has become a subordinate that fuels China’s thirst for natural resources, especially oil and gas.

And as crazy as it sounds, this could be the catalyst that shapes a Russia-US alliance.

This would represent a critical power shift, given that the US and Russia are among the world’s largest oil and gas producers.

It truly would give birth to a powerful oil cartel.

But one question remains…

Is this the ultimate US ‘game-plan’ in regaining its hegemonic status in the global economy? Perhaps.

And it certainly makes sense given that access to oil and gas is China’s central vulnerability, its economic Achilles heel.

America’s key rival dominates manufacturing, competes in high-end tech, and controls supply chains for numerous critical minerals.

The US knows it can’t compete against China on these trade fronts.

And that’s why oil could be its last weapon in maintaining global dominance.

With all things considered, a US-Russia alliance is not an outlier; it’s a rational strategy that aligns with both countries’ interests.

Your strategy

Fossil fuels aren’t dead.

What’s happened in the Middle East is a clear example of the critical reliance we have on oil and gas.

Yet this event could be one of many that further pivot the global economy between the ‘haves’ and the ‘have-nots’.

Either you have access to cheap and abundant oil and gas, or you don’t.

Make no mistake, we live in an oil-fuelled economy; crude is the lifeblood that feeds economies.

As we’re learning right now, tight oil supply suffocates a country’s ability to manufacture, build its defence, or gain an edge in the AI race.

Any prolonged constriction of oil supply will inevitably sow the seeds of internal discontent, and that’s perhaps China’s biggest fear of all.

Control the oil, control the world!

And that, I believe, is America’s primary strategy in gaining the upper hand in the great power grab that’s underway between the world’s two largest economies.

And it will likely stay that way UNTIL a viable alternative to oil and gas emerges.

No doubt, China will move heaven and earth to try to make that happen.

But given that fossil fuels ARE the energy of today, American hegemony could result in years of coercion against ‘have-not’ nations.

China and Europe stand to lose the most from an American Oil Cartel.

And if you think that’s even remotely possible, the investment angle is clear: buy oil and gas stocks!

Any major dips from now on should be viewed as an excellent long-term buying opportunity. That’s what I’ve been doing for my paid readership group, well before tensions kicked off in the Middle East.

But this is a long-term theme. There’s still time.

If you’d like to join me on that journey, you can do so here.

Until next time.