The new world with Trump III - HATICE KARAHAN

The new world with Trump III

The APEC Summit I mentioned in my last article took place in Peru. Russian President Vladimir Putin, who has been in the spotlight after President-elect Donald Trump's victory, gave messages of hope in terms of Russia's relations with the U.S. Putin, who added that he would be waiting to see how the new president's statements would be applied in the White House, also stated that Trump too was interested in continuing the U.S.-Russia relations. And he continued: “ We are ready too.”

What did Trump say during the election campaign? He brought up the U.S.-China-Russia triangle topic, for which you can find details in my article, “Is Nixon turning over in his grave?” written in December 2014.

“Russia is forming an alliance with China. Why? Because of our mindlessness. We drove both of them mad and ensured they came together. China needed petrol so they came together. They even did a sea drill (military) together. If there is something I have learned since I was young, that would be to ensure that China and Russia never come together.”

If this is the case:

“Wouldn't it be great if the U.S. and Russia got along, came together, took down Daesh and did other positive things together?”

Trump, who referred to Putin as a powerful leader during his election campaign, also mentioned that he would lift the sanctions on Russia.

If the sanctions are lifted

As we all know, the Russian economy has suffered a great deal from Western sanctions since 2014. Therefore, Moscow is waiting for these sanctions to be lifted and is expecting to better its economic relations with the U.S.

Of course, the U.S. is scared of the concessions it would have to make. A Russian threat, which will feel freer geopolitically after Trump's victory, will upset the congress including the Republicans. Putin, who is accused of shadowing the election campaign period, is drawing a lot of rebuff these days.

On the other hand, we know that members of Trump's group will also have a say on Trump's approach. We have already started to hear news in this respect.

Nevertheless, the U.S. president's special rights can sometimes be so powerful that no one can stand in his way. There are such complicated reasons besides the economic ones with Russia that things are very vague. This goes from the Syrian issue to the plutonium issue that was put on hold last month. Therefore, it is possible that Trump will take positive steps toward Russia, but if he does not take the right steps things might go sour.

From APEC to OPEC

One of the critical questions that were directed to Putin during the APEC Summit was the question about petrol. The Russian leader, who was asked about the OPEC agreement, which is expected to be made by the end of this month in Vienna, made positive comments on this issue too. Putin, who foresaw that an agreement within OPEC is highly likely, also states that Russia might hold production at current levels.

But the OPEC countries do not sound very clear these days. They were busy discussing the problems within the organization itself, and now they have Trump to deal with. What did Trump say? “One of my main focus points are OPEC countries.”

Why?

Remember how Trump said, “Why do we buy petrol from Saudi Arabia anyway?”

“Especially while we have our own reserves waiting…”

“Especially when the OPEC combination allows the prices to fall down and bring our petrol companies down…” For this reason, Trump had needled the “Lifting the restrictions on U.S. energy reserves” article that stymied the hundreds of millions of dollars-worth recruitment, which is one of the actions he is going to add to his list of “things to do the day I set foot in office” to protect American employees.

Thus, in this way, the U.S. will lower its dependency level and increase its competitiveness.

11 percent Saudi petrol


According to the 2015 EIA data, 40 percent of the crude oil that comes to the U.S. comes from Canada, and Trump has a positive approach to this with his Keystone XL Project. On the other hand, 31 percent of the U.S.'s import comes from OPEC countries. While Saudi Arabia's share is 11 percent, it is important to remember that the Kingdom has refinery investments there, too.

Saudi Arabia, which has many problems with the U.S., including the Middle East geopolitics and JASTA, is seriously thinking about what will happen with its oil after Trump. Moreover, the statement made by the Petrol minister a few days ago proves this: “Trump should think properly. It wouldn't be wise to cease exports with us.”

A camouflaged fear, a polite challenge, a timely warning.

The roads to Vienna

Now to get back from Saudi to OPEC; questions about where the oil market will go after Trump have increased. If Trump turns out to be a man of his words and starts to pour his resources, will OPEC's agreement to increase prices be of any use? Wouldn't this mean that production will be restricted and room will be given to U.S. petrol? Yes, all the expenses we discussed earlier are important at this point, but there is a possibility that Trump's support will make U.S. petrol competitive.

I believe there are neither entirely white nor entirely black possibilities for the parties. However, all these possibilities will lead Saudi Arabia to think while on the road to Vienna. No matter what decisions are made in November 2016, they will affect Trump's actions whether good or bad.

And Trump's operations closely concern OPEC members. For example, Iran.

I will be back on Friday with the last part of this series.



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