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Our View

The world is in flux. 

Yesterday, Moscow ordered companies to reduce oil output in the second quarter to meet a production target of 9 million barrels per day (bpd) by the end of June. According to three industry sources, that’s in-line with its pledges to the producer group OPEC+. 

At the same time, China  warned the US that "the elephant in the room that will always shake the foundations of any attempts to build better relations, is the Taiwan question.” Any attempts to exploit the Taiwan question, which is an internal affair of China, will always call into question the US's sincerity and its commitment to mending relations. 

Houthi rebels in Yemen are said to have hypersonic missiles, while Israel’s deadliest foe, the Lebanese Hezbollah is at risk of an all-out war after the U.N. vote, and Israel called off meetings with the U.S. about Rafah, as relations grow more tense. I don’t think Xi would have thought in a million years that Putin would be bogged down in Ukraine over 2 years after the invasion while he is dealing with problems in his own backyard. Finally, China's economy is facing significant challenges, including declining property investment, accumulating debt risk, and weak consumption growth, all of which pose downside risks to China's growth trajectory in the near term. 

When you add all this up, it's not hard to see how the US could get caught in a wider, more risky war in Europe, Asia, or the Middle East.