...now that we are living in an era where India and China are being positioned as "rivals" of the American hegemon, it certainly makes sense that we will see the key tenets of Pax Americana challenged.
I've been looking at some of the globalist summits around the world lately but here's one that slipped under the radar: the International Energy Forum. The IEF's 16th bienniel energy ministers meeting took place in New Delhi this past April and brought together 5o of the world's energy ministers, 30 energy company CEOs and 12 heads of international organizations. Although it didn't exactly make headlines at the time, an interesting story has emerged from the conference.
This past Wednesday, India's Petroleum Ministry tweeted out a link to a story from an Indian financial publication reporting on an idea floated by Indian Oil Minister Dharmendra Pradhan at the IEF conference. The idea? For India, Chian, South Korea and Japan—all oil hungry Asian nations, all currently at the mercy of the OPEC cartel—to form "an 'oil buyers club' that can negotiate better terms with sellers as well as getting more US crude oil to Asia to cut dominance of the oil block."
And this isn't just talk. Pradhan followed up by confirming he had raised the issue with OPEC ambassadors at a meeting this past Thursday. India, at least, is keen to get this done.
Why? Well, currently the key OPEC producers like Saudi Arabia charge an "Asian premium" for oil sold and shipped to East Asian buyers like India and Japan. This amounts to an extra $5-10 billion that some of OPEC's best customers are paying on top of the cartel's regular rates, an issue that particularly sticks in the craw of Pradhan.
Think of this "buyers club" as a counter-OPEC. China is the world's largest oil importer (having overtaken the US last year). India is the third largest, with Japan and South Korea rounding out the top five. Between them, they account for one-third of all oil imports in the world. Clearly they have clout. So if the oil producers can band together to set higher prices, then why shouldn't the buyers band together to demand lower prices?
India's impatience on the issue is easily explained. As many will have noticed, Brent Crude prices surged above $80 a barrel last month, a level not seen since the great (manipulated) oil slump of 2014. But Indians especially noticed it, as the price run-up coincided with a surge in the dollar meaning gasoline and diesel prices in the country spiked to five-year highs. China, too, is feeling the pinch, with oil imports by the country easing off from record highs in conjunction with the price spike.
Now there are obviously plenty of reasons for India, China and other oil-dependent Asian nations to band together in a "buyers club" compact. But those reasons have always been there, and arguably the incentives to form such a counter-OPEC were greater several years ago when prices were much higher. So the real question is: Why now?
Well, in fact the idea is not a new one. It was first proposed (again by India) in 2005. But 13 years ago the world was a very different place. The BRICS were still just a twinkle in Goldman Sachs' eye. China's petroyuan was yet to be born. The newly-minted "Indo-Pacific" was still just the plain old Asia-Pacific. And the US of A was still the world's largest oil importer and the uncontested king of the petrodollar order.
Obviously, as the hoi polloi in general and Corbett Report followers in particular will know by now, all of that has changed. Dramatically. And now that we are living in an era where India and China are being positioned as "rivals" of the American hegemon, it certainly makes sense that we will see the key tenets of Pax Americana—including the petrodollar that underpins the world monetary order—challenged.
Long-time readers of this column will already know what those quotation marks around "rival" are about: The "rivalry" here is an illusion. The fall of the old world order and the rise of the new world order from its ashes is every bit as engineered and manipulated as the old order itself was. The BRICS and the various counter-institutions that there members are creating to "challenge" the existing order are themselves phony pseudo-alternatives that, in the end, will only bolster the growth of collectivism and regional governance that are necessary stepping stones on the way to global government. But for all its engineered phoniness, the change is happening. And the creation of a counter-OPEC led by the Asian nations would be one example of that.
So the questions before us are manifold. Will China, Japan, South Korea and other Asian nations join India in its quest to end the OPEC "Asian premium?" If so, will China be looking to merely broker a better deal with OPEC, or will they be looking to transition settlement currency into yuan? Would an Asian switch away from OPEC oil and toward US shale oil further destabilize Saudi Arabia, Venezuela, and other countries that are almost exclusively dependent on oil revenue? And how will all of this play into the transition to the "post-carbon economy" that I discussed in "Data is the New Oil?"
We may not have to wait very long to get the answers to these questions. The Indian government has announced that Petroleum Minister Dharmendra Pradhan will be in Vienna next week to attend the OPEC International Seminar. So while the mainstream news world will be focusing on the will they/won't they aspect of possible OPEC production increases, International Forecaster subscribers will be able to look for the real story. How OPEC responds to a potential counter-OPEC will provide us with significant insight into precisely how the oiligarchs are looking to transition the world into the "post-carbon future" and how long it will take to get there.