It’s worthwhile to note that the threat comes from volatility in oil prices, not higher expenditures on oil. Oil is like blood for an economy, because too many things depend on cheap transportation and cheap plastic, so sudden price shocks squeeze the entire economy at once. The risk alone is anathema to economic growth and investment, because it’s extremely expensive to buy insurance against a constant risk of the entire economy failing (think hurricane insurance, but if the entire economy was in New Orleans, including all of the insurance companies).
Russia account for around 11% of global oil exports, and it’s mainly significant because China needs to import lots of oil and will be economically defeated if they can’t, but China doesn’t trust Russia OR any of the Gulf states. Russia and China have a complicated relationship, which would come apart at the seams if it wasn’t for the common threat faced by the post-Cold War US, and even with that common threat, both Russia and China would still maneuver to be the country that gains the most out of each deal/bargain.
If anything, it will probably be supply chain disruption that will have the biggest effect, exacerbating the chip & battery shortage (thwarting electric cars), whereas disrupted pacific supply chains will weaken green energy manufacturing that goes through China i.e. solar panels and wind turbines. Without trust between the US and China, there’s the constant risk that China will use state subsidies to sell green energy tech at a discount, eliminate the competition from everywhere else in the world, make everyone dependent on their tech, and then eventually exploit their global monopoly by raising prices as high as they want. Almost every government/military/political party in the world is more afraid of that than climate change.
It’s probably for these reasons that Biden will open more American oil fields, even through Trump spent 4 years failing to reopen coal power plants. Coal can be replaced with a stable energy source, by natural gas alone, but oil can’t (not without cheap chips and batteries, anyway).
It’s worthwhile to note that the threat comes from volatility in oil prices, not higher expenditures on oil. Oil is like blood for an economy, because too many things depend on cheap transportation and cheap plastic, so sudden price shocks squeeze the entire economy at once. The risk alone is anathema to economic growth and investment, because it’s extremely expensive to buy insurance against a constant risk of the entire economy failing (think hurricane insurance, but if the entire economy was in New Orleans, including all of the insurance companies).
Russia account for around 11% of global oil exports, and it’s mainly significant because China needs to import lots of oil and will be economically defeated if they can’t, but China doesn’t trust Russia OR any of the Gulf states. Russia and China have a complicated relationship, which would come apart at the seams if it wasn’t for the common threat faced by the post-Cold War US, and even with that common threat, both Russia and China would still maneuver to be the country that gains the most out of each deal/bargain.
If anything, it will probably be supply chain disruption that will have the biggest effect, exacerbating the chip & battery shortage (thwarting electric cars), whereas disrupted pacific supply chains will weaken green energy manufacturing that goes through China i.e. solar panels and wind turbines. Without trust between the US and China, there’s the constant risk that China will use state subsidies to sell green energy tech at a discount, eliminate the competition from everywhere else in the world, make everyone dependent on their tech, and then eventually exploit their global monopoly by raising prices as high as they want. Almost every government/military/political party in the world is more afraid of that than climate change.
It’s probably for these reasons that Biden will open more American oil fields, even through Trump spent 4 years failing to reopen coal power plants. Coal can be replaced with a stable energy source, by natural gas alone, but oil can’t (not without cheap chips and batteries, anyway).