Recent headlines have broadcasted the Gulf Cooperation Council’s new deal with China, with tens of billions of dollars. Some may see it as a signal of a coming divorce with the West, but careful analysis reveals that the GCC can balance relations to both sides.

The United States has complained bitterly about the recent OPEC announcement of a cut in oil production, which was seen as providing indirect aid to Russia and as a slap in the face to U.S. President Joe Biden. But U.S. complaints have been met with a sharp backlash from Saudi Arabia as it looks eastward.

U.S. President Joe Biden’s recent trip to the Middle East was disappointing at best against the backdrop of the conflict in Ukraine. The Biden administration’s attempt to promote allegiance against Russia and promote oil production has ultimately fallen flat.

A permanent reduction in global oil and gas output may come sooner than expected. Fossil energy companies are looking ahead with caution. Instead of investing their profits in exploration or production, they are turning to capital markets.

When achieving a stable global economy supercedes local and political interests, and a sustainable rebound in the global oil prices begins to emerge, this will soothe the chaos in the geopolitical sphere, the price wars among the oil-producing countries, the sluggish investment and consumption in the world economy, the capital market’s negative judgment about the future business growth and the “liquidity trap” in the monetary policy.

The last months have witnessed oil prices at global markets dropping by more than 50%, the primary reasons being due to Saudi Arabia’s political protectionism over oil prices. Jin Liangxiang contends that beyond purely economic factors, Saudi Arabia actually intends to express its discontent and frustration, especially with Iran.