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The meeting of G7 leaders and of leaders from India, Indonesia and Argentina, South Africa, ended with a sense that economic sanctions the preferred tool against the Russian invasion are not working after 3 months. Discussions with India, Indonesia and other poor countries show the need for the developing countries for access to their large populations of oil at reduced prices from the recent skyrocketing prices. With oil and energy purchases made by China and India and other poor countries for reasons of price discounts from $125 per barrel oil, Russia is able to sell oil in other markets making up in price for the drop in volume. 

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US trade deficit of $46 billion with India and DJT call to buy oil and gas from the US, to shift away from purchases of $50 billion of oil from Russia, of 2 million barrels a day. India only imported $1 billion of oil from Russia in 2020 and this is a call from the US to India to stop financing Russia's increasing air attacks on Ukraine in August 2025. For India this oil came at $70 a barrel when prices were around $90-$100 a barrel in 2022-2024. In 2025 oil prices are at $60 a barrel, and even if prices increase to $70 a barrel India can make the shift. US and Germany, the EU, Britain which seek negotiated end to the war in Ukraine will continue to pressure India in 2025. Russia could shift some of the oil to other places but the huge demand from a country India's size will not then be seen as a factor in prolonging the war. India needs to think ahead for the next 20 years and its goal of modernization by 2047 like China has done in 2000-2020. And not get into a nationalistic mode that may not be in the best interests of the Indian people seeing that this may serve the interests of all nations including Russia to phase out this European war. ...

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US Naval Blockade Day 10- US stock markets up 4.1% for 4 months, oil price $95 a barrel, prices at pump $4.02 down from $3.94 a month back. If all the US seeks out of an agreement is getting nuclear material out of Iran to keep nuclear weapons out of the Middle East based on 5 decades of war in the Middle East- Afghanistan, Syria, Iraq, and now Iraq/ Lebanon- this is to protect the people of the world from nuclear weapons, including China, India, Brazil, Russia, EU and other nations. This was the goal of Democratic administrations also, only the Republican approach is to err on the side of safe and take zero chances on future nuclear escalation while the Democratic administrations were based on trust, trust which is not a sure thing in the Middle East political and cultural environment. Some of DJT comments were bluster, but the basic position is the same- against nuclear proliferation for a safer planet. In this light the Naval Blockade only seeks not to block Iran's path to a prosperous economy and a bright future for its people. Iran's economy is affected in the same way that India's and China's, Africa's is affected, for upwards of 4 billion people compared to 100 million for Iran. Africa, Pakistan and Bangladesh, Indonesia, among the poorest in the world, poorer by far than Iran. The economic impact on this part of the world is not part of Iranian perceptions. The economic impact on Gulf kingdoms an adversary of Iran is by comparison only a small fraction of the impact on the poorest countries. In this situation US is working to support the poorest segments of the Chinese people ( the part of China in the hinterland that is the one third not urbanized) and the Indian people through its cooperation and direct or indirect support. In this perspective the US economy stands as a steadfast support for US policy of fairness and respect for all nations since 1900- US is not one of the colonial powers such as Britain and France who created some of the artificial states Syria, Iraq, out of the remains of the collapsed Ottoman Empire in the interest of their Empires by 1921, and setup regimes in Iran for its oil, that are the source of today's problems and wars. No Empire of Britain and France promised Iran $28 billion as this Nation does today if Iran ships nuclear material out of Iran for a 100 percent shift to a peaceful Middle East that works for the modernization and industrial development of its economies in the interests of the people. ...

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It might not all make sense that the Pakistan/China mediated ceasefire conditions (including US and Israeli condition of no nuclear weapons development and ballistic missile development) are really not known even in the media today, only known to the Iranian government and the US government. In these conditions Iran's government gets to show that it had achieved its goals, even with enormous reconstruction costs of the damage done during the war. DJT had pointed to a sort of regime change in Iran after most of the earlier leadership has been removed, and new leaders in place who are keen on setting up conditions for their own administration replacing the old one.  Over the period 2027-2030 the prospect is real that China, India and Japan may shift their oil supplies sources to other regions, increase conservation per unit of GDP, and increase supplies of renewable energy, steps already taken by Germany over the last decade. Most media looks only what happens today and in 2026. This may be the last of the Middle East Wars before Europe and the US, and India, China, Japan shift away from the Middle East to get supplies of fossil fuels, and it may bring new renewables technologies that reduce the dependence on fossil fuels to the point of making a true transition to renewable energy. It may also be the last of the Middle East Wars in the sense that people of European nations and the US insist on no involvement in MIddle East as a sort of quagmire for squandering American, European and Asian vital resources of people and capital, ample example being given over the last 40 years. Considering the costs of the war and the moral cost of destroying infrastructure such as power plants that hurt the local population more than the regime in power, China, Japan, the US, and EU, India may find it is easier to race each other in coming up with alternative supplies and shifting to renewable energy faster than planned, making Middle Eastern oil supplies  and volatility in prices redundant, which would be a good thing after the hugely negative and costly experience of the last 50 years of dependence.     ...

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Deteriorating China Iran relations as the oil imports from Iran for China face US tariffs of 25% on China's exports to US, and US economic relations far more significant for the Chinese economy. China gets somwhere between 1.4 to 1.6 million barrels aday from Iran (80% of Iran's oil exports) into Shandong refiners at $10 below Brent crude prices. Another 400 mbd comes from Venezuela to China. This means $30 billion comes to Iran from oil sales to China at $59 a barrel, and $8 billion for Venezuela from oil sales to China. This has financed much of the bellicose policies towards the US in the western hemisphere and in the Gulf region. Iran's bellicose policies in the Middle East, its nuclear policy, are now seen by China as a distraction and  detract from good economic relations with the US. China $400 billion oil deal 25 year cooperation agreement signed in 2021 was signed under the Biden administration and China today faces a completely different situation in 2026. Even China's relations with Russia are not the same as the US builds better relations with Russia. A wind down of the Ukraine war would change the situation completely and ensure peace in Europe including Russia, as the US works with the EU to meet future challenges having learned from this experience in Europe (Ukraine dividing Europe) and in the Western hemisphere (drug/ migrant. trafficking). When historians write this chapter of the inflows of capital from advanced West to Arab countries and the Gulf region they will write about the huge contrast between China/India's efforts to modernize and these nations where much of that capital was wasted in wars and conflicts and in grandiose projects that made no material difference to the standard of living and quality of life of the vast number of ordinary people. Once the oil dividend is gone with fossil fuels replaced with renewable energy by 2035-2040 this opportunity to advance is lost for the Arab and Gulf region. ...

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Daniel Yergin, expert on international oil markets, says the oil price cap set by the US and EU at $60 and the European prohibition on Russian oil imports after Dec. 5, means the end of the global oil market. That global oil market came into place with the collapse of the Soviet Union and the industrialization of China. In its place comes a partitioned oil market shaped by not only economics and logistics but also by geopolitical strategy, says Yergin. This means Russia no longer sends 4 million barrels a day to Europe. The price cap is a US strategy to prevent a price surge with Russia cutting production to raise prices. It is working. with a slowing world economy, and shipping companies reluctant to take on unknown liabilities from government penalties, the price of Russian oil is now at mid $40's, about 45% below the benchmark price and 33% below the $70 price of oil on which the Russian budget is based, says this report. This has an unintended effect of enabling India to support its modernization drive with oil imports at reasonable prices coming just after a pandemic. ...

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Kristof of the NYT writes about DJT Action in Venezuela January 3, 2026.  Some of the least understood aspects of the US president's language on Venezuela- The president's reference to oil resources is not for the US to benefit from the oil reserves. It is about oil in the sense that the oil industry in Venezuela is in total disrepair and broken from years and decades of nationalization followed by lack of investment, lack of western technology.  Sanctions put a huge price on the Venezuelan economy with the brunt of it borne by ordinary people- the same people that a socialist like Hugo Chavez thought he could help with his erratic ideology. As China, and now India has learned the only way to get ahead in this world for nations is to invest, invest, invest with larger and larger pools of capital, technologies and labour. By alienating the US or EU there is a loss of technologies and of investment so that one is going to bat with only one strike and you are out, so that from Day 1, China under Mao, India under Nehru had lost the race, so did all the "socialist" regimes in the world. Conversely China under Deng and successors, and India under Modi are breaking development records. How does the US change this? First it removes the sanctions on the Venezuelan economy. Second it gives Chevron the green light for increased production. Oil facilities of the Venezuelan oil company will get foreign investment and US investment from American oil companies with returns for both and the state oil revenues invested under a government that is able to invest it free of corruption or it being funneled out of the country to support other regimes in Latin America. This will rebuild the country's health system, its broken infrastructure, restore its finances, and make it in a decade one of the advanced economies in Latin America. But only if- the gangs and other private militias, the other military elements from the two decades of utter mismanagement and drug trafficking are  removed. A new way will have to be devised that the US as to work out ad hoc meaning in the process of doing, invented that meets the conditions of getting this done and the process of reconstruction of Venezuela under the Monroe doctrine of keeping the entire western hemisphere free of such elements. The US achieved this with the help of Great Britain in 1823 when it was only 50 years since it's founding in 1776. The US has the resources in 2026 to make this happen in the interests of the people of the western hemisphere, in the quality of life of people in the western hemisphere. It does not seek any country's resources, it seeks the development of the countries in the western hemisphere in the great tradition of Jefferson, Monroe, Lincoln, FDR and JFK. ...

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US and Iran accept Pakistan's mediation of the war with a 2 week ceasefire and opening of Straits of Hormuz- April 7 2026. The mediation by prime minister Sharif of Pakistan gave both sides in the war a way to back down. Both sides agreed to talks in Islamabad, Pakistan. As a partner of Pakistan, China may also have a role in setting up a settlement as China and Japan have the most to lose from the Straits of Hormuz being closed, oil prices rocketing up to $115 and higher, and even a prolonged shutdown of Hormuz Straits. Both China and Japan get 90% of their imports from Hormuz Straits. Oil prices drop to the $100 level from $115 after the announcement of talks in Islamabad. This is not a long term settlement. After the two weeks US president meets president Xi of China in Beijing shortly afterwards on May 14-15. It is likely that preparations for that trip will involve China and Pakistan working together to get the US and Iran to agree to an extension of the ceasefire. One outcome of this war is as Le Monde has noted- the unreliability of Hormuz supplies and shift to imports from US and Venezuela and other parts of the world for fossil fuels. And with this a renewed effort to reduce the fossil fuels needed by accelerating renewable energy supplies in Europe, India and China. More attention will also be focused on reducing the proliferation of nuclear weapons by all major powers. Removing US involvement in NATO may also turn out to be positive in some ways to bring Russia and US as nuclear powers to better working relationships, and reduce the nuclear arms race and weapons race. For Europe it means meeting needs of Ukraine and improving military capabilities. The overall result may be positive for all countries. The Middle East region will be seen as one in which no powers should get involved in and the Middle East will also find it has squandered its valuable oil dividend in five decades of wars and mismanagement and fall behind the rest of Asia and Europe, the US in economic progress and development. ...

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India US trade relationship needs a complete rethinking in 2025 as trade tensions increase. In addition India needs to accept that the US or some other power has to maintain peace from a possible nuclear escalation that would be so damaging to south Asia and the world, and the US role under DJT seen in this context and welcomed. For this to happen both US and India need to look beyond the past perceptions of ethnic divisions as India industrializes, beyond China, as India's modernization will change everything in Asia and the world. Possible opportunities exist in India offering it's strengths in pharmaceuticals to reduce costs of drugs to ordinary Americans. India could take advantage of the reduction in oil prices under DJT to reduce purchases of Russian oil so that it is getting nearly the same price when oil prices were high and Russia offered discounted oil.  On agricultural exports to India, India can look for better ways to tackle this offering some transition period to when the US could send some quantities of exports in areas where India's rapidly growing middle class can absorb US fruits production such as cherries and apples, other fruit. India could help the US in the pharmaceutical and other sectors as a way to address US desire for reducing costs of drugs in the US. India could for instance make the drugs at a low cost in the US, investing in factories in the US to supply low cost drugs to average Americans tackling one of the biggest problems the American people face. ...

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As its economy slows and facing high debt levels, China benefits by an estimated $18 billion a month from lower oil prices in 2015. The estimate is from Starfort Holdings, investment and private equity group. The estimates as China benefits from lower prices of all commodities, including oil, are of about $250 billion annually as China replenishes its stocks of commodities. With $12 million barrels imported daily China is a major emerging market beneficiary, along with India, of the drop in oil prices. Continuing pressure on prices from the expected resilience in shale oil production in the U.S. with learning and the development of new production methods means the benefits are likely to continue. China has also not renegotiated price points in deals made earlier at higher prices with China and Venezuela, as it pursues its foreign interests. Stockpiling of grains and edible oils are being increased by 33% in 2015 by $24.7 billion.

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After sanctions were lifted in 2016 on Iran India and China increased oil imports from Iran. China and India ramped up imports each country importing 900,000 barrels of oil per day in 2016. Since then China has reduced imports from Iran to 500,000 and India has reduced imports to 600,000 in anticipation of possible sanctions. India received a limited waiver from sanctions for oil paid in rupees before sanctions were lifted. 

Chinese officials say alternatives for importing oil are available, and that it is more concerned about the price of oil.

Oil prices affect development because as in the case of Indonesia and India reduced oil subsidies and savings can be diverted into infrastructure development in Asian countries. The recent surge in the price of oil adds to the pressure on budgets and fiscal deficits in developing countries.

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Oil prices at the pump for automobiles are declining for the seventh straight week. Prices declined to about $4. In Texas the average is about $3.67 a gallon. California has the highest gas prices at an average of $5.46 a gallon. The price decline is a result of rapidly slowing growth in China. China and India are still getting oil supplies from Russia which frees up oil supplies for the US to import. 

Public in the US is also cutting back on driving and the miles driven is likely to see a drop of 5-10% this summer. There is better planning of trips to combine errands. This helps combating climate change through conservation efforts that were neglected during the last decade.

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Instead of a jinx much to the contrary the US economy outlook for 2030 in Feb 2026- a surge in investment spending in 2026-2030, new manufacturing investments and lower energy costs, moderating inflation, are likely to propel the US economy ahead to 2030.The effect of tariffs as a policy making tool has been muted because of exemptions, reversal of tariff rates once key objectives were secure for tariffs as a way to get action on foreign policy as with Indian purchases of Russian oil, deals with Japan, South Korea and China, India, UK and the EU. Some sources such as the Philadelphia Fed see price rises reaching 3% in some inflation guages more than the moderate 2.5% in the consumer price index for January 2026. These sources see the hiring slowing down just as layoffs begin to happen in the latter part of the year which is a possibility but less likely. At this point in Feb 2026 there is a tendency not to layoff and to hang onto employees, and hiring has been slow in 2025. January's report of 130,000 jobs added is the first sign of strengthening of the jobs market. Overall a cautious view would be to call it a soft landing after the inflation surge of the covid period. Another way of looking at is is more in line with the strategic direction of the US economy- freeing up the economy with investments in energy,  reducing the key costs of production, tax policy of Bessent's complete one shot depreciation of equipment increasing business investment, tariff policy making the world trading system fairer and now more attuned to US interests, all creating an investment and jobs surge in 2026-2027. There is an added benefit from US efforts to free up the world trading system from the stranglehold placed on it by China with its control over world manufacturing. A dominance and unwise concentration gained from the serious mistakes of the Bush-Clinton period of not putting in safeguards for US factories and jobs (that form the backbone for families in neighborhoods towns and regions across the US), and US business interests growing indifference to the very communities they were based in by outshoring to China destroying whole regions in America. Even where it is criticized or seen as negative there are huge benefits when the US acted. Tariff increase on India is a clear example- it built Indian resilient attitude in June-Feb 2026, and during this period it cut funding Russia's war in Ukraine by sourcing energy from other sources, the US policy led to India and EU+ Germany signing trade agreements to double their effort and double trade and scientific cooperation ( a goal secured for the US as it reduces concentration in China), was followed by US signing its own trade agreement with India within days, and increases world trade of US and EU and Germany in ways that will bring 2.5 billion people into a strong partnership that overshadows anything that happened in China in the Clinton-Bush-Obama years of failure. ...

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Indian oil minister Hardeep Singh Puri says India has diversified its sourcing of oil supplies to avoid dependence on the Straits of Hormuz. It has weeks of reserves. Saudis have 5 million barrel a day pipeline to bypass Hormuz waterway and UAE 1.5 million barrel a day pipeline to bypass Hormuz waterway, so that 6.5 million barrels a day could be added to meet Asian oil demand, in addition to convoys escorted by US warships  in Hormuz waterway to meet demand from China, India and Japan. This would mean China is itself dependent on American seapower to maintain it's oil supplies, a third of which come through the Hormuz waterway and keep important sealanes of navigation open. China, India, Japan, and other World are critical for the world economy manufacturing sector and comprise 3.5  billion or about half of the world's population. In addition Latin America and Africa are dependent on oil supplies and prices.  New pipelines, renewable energy, will become more important in the years ahead, and figure more in planner's minds after this Hormuz episode. ...

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India's crude oil imports were sharply higher in 2011 and 2012. India's imports of crude oil for the first 11 months of the 2012 fiscal year ending March 31, show a 40% increase over the same period in 2011 fiscal year. India's import bill was $128 billion for crude oil imports for the 11 months of fiscal year 2012. Indian subsidies to lower prices for fuel are $30 billion annually. The higher prices for crude create inflationary presssures in India and restrict economic growth.

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A good look at the Indian economy is provided in this year end review by The Hindu. India navigated through a difficult environment with fluctuating oil prices and inflation in the international economic environment, and yet maintained investment in infrastructure for future growth.

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Princes MBZ of the UAE and MBS of Saudi Arabia were seen as close with MBZ the mentor of Prince Salman of Saudi Arabia (MBS). Saudis and UAE differ on how high oil prices should go. Both MBZ MBS wider mindsets are close based on modernization of the Arab world. Oil price increases mean hardship for most of the world's population, a shift of wealth from more populous countries such as Turkey and India to countries with very small numbers of people as the UAE (9 million) and Saudi Arabia 35 million). It poses hardship in cost of living for people in Asia, Africa and in EU, the US. This calls for a vigorous effort to make the switch to solar energy to reduce inequality and wide disparities of wealth in Asia and the Middle East.

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A recent Deutsche Bank study points to the pro-cyclical nature of oil prices in this decade where oil price increases do not lead to decreased worldwide consumption. The IEA forecast is for 1.64 million barrels of oil a day in increased coonsumption in 2013 compared to 2011, which hides a drop in consumption of 640,000 barrels a day in OECD countries. That is offset by higher demand in China, the Middle East and Russia. Middle East consumption is about 80% of consumption in China, and oil price increases lead to higher growth in these countries and Russia leading to increased oil consumption reinforcing a pro-cyclical cycle. What is not clearly understood is how this changes with weaker economic growth. Additional factor to consider is future increasing growth of oil consumption in India, Pakistan, Bangladesh, Indonesia, Vietnam and other developing countries that offset reductions in Chinese consumption as China's growth rate slows.

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Efforts to increase investment in exploration for oil and natural gas by the Indian government include an increase in the state mandated price of natural gas to bring it closer to world prices.

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The US, China, Japan, India and South Korea will release oil from their strategic petroleum oil reserves to dampen the steep rise in oil prices. The Biden administration will release 50 million barrels of oil from US reserves onto world markets. This is about half of the 100 million barrels of oil of daily world consumption. The effect on oil prices is muted because the move was expected.

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Washington Post Analysis and reporting shows Russian economy is now sensitive to cuts in oil purchases by India. Russian economy with $213 billion a year in the war effort would suffer from higher inflation and interest rates higher than current 18% if India cuts Russian oil purchases of about $119 billion a year. A shift may be already taking place as India buys more from Saudis, UAE and Iraq. Studies by CLSA cited in the Economic Times show India gaining only about $1 to 3 billion by buying Russian oil. India has much more to gain by shifting away from Russian oil. Russian inflation is at 9% and the economic growth is about 0.4%.  A further increase in interest rates from 18% in a war time economy could kill the civilian economy say experts in Russia the Washington Post has talked to. About 17% of Russian refineries production is removed by Ukrainian strikes on refineries in Russia, leading to higher prices for oil. More crude oil is being exported instead of refined product as a result. This explains why the US under president DJT decided to take the difficult step to deter India from Russian oil purchases as it would not have been able to get China to reduce its $136 billion Russian oil purchjases each year the way it could for India. This was done to end the war even though it is little understood in India.  ...

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Oil prices drop below $38 by mid-December 2015, as the Saudis continue to push prices down further by continuing production increases. No change is planned for 2016 and analysts expect low oil prices into 2016. At $38 a barrel it becomes uneconomical for most shale oil producers to operate in the U.S. About 50,000 jobs are lost in Texas and 250,000 jobs worldwide. This is a boost for large oil importers such as India, Japan, and Europe. China also stands to benefit from low oil prices. Nigeria, Venezuela, Iran and Russia have the most to lose from an extended period of low oil prices. Politics in the Middle East also may play a part in decisions as the Saudis oppose intervention in Syria and Iraq by Russia and Iran. Rising shale oil production in the U.S. could also be one of the additional targets of Saudi policy. One consequence is that OPEC is divided with the Saudis going their own way.

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India is storing as much oil as it can at today's low oil prices of about $20-$30 per barrel in May 2020. With India asking the U.S. to store oil from U.S. shale producers at its strategic petroleum reserve storage facilities in the U.S. Already its existing storage facilities of 5.3 million tonnes (39 million barrels) are full, and the storage capacity will be more than doubled with an additional 6.5 million tonnes (48 million barrels) to be built quickly. About 8.5 million tonnes (62 million barrrels)  are in ships on oceans around the world. Demand is only 20% during the lockdown but is expected to reach levels of 2019 by June 2020. Only about 20% of oil consumption comes from existing storage.   That Indian oil capacity is 39 million barrels of storage shows how little was done over succeeding administrations without national aspirations for a growing country with hundreds of million of young people, when the oil storage capacity today of 39 million barrels compares with over 500 million barrels for Japan and for China. A huge Indian government aid package of $280 billion for the economy can be offset by gains in other areas such as low oil price oil storage, and gains in supply chain manufacturing, increasing the size of the domestic market for local manufacturers with incentives and loans, and new rules for stressing local manufacturing for a self-reliant economy. ...

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Iraq is Iran's most promising market for gas exports. Iraq needs the gas for its power stations now that Islamic State has been decisively cleared from Iraq. Yet Iraq is having difficulty making payments to Iran for gas supplies because banks are not ready to handle the payments with the reimposed tighter U.S. sanctions and restrictions. The deputy head of media at the Electricity ministry in Iraq, Sadoun Shehan, told WSJ that transfer of money by Iraqi banks is prevented because of U.S. sanctions. U.S. sanctions were reimposed by the Trump administration after they were lifted in January 2016. The new sanctions prohibit gas exports from Iran. Iran had hoped to make the sales and also export to the European Union when sanctions were lifted. Iranian exports of gas that started in 2017 were itself delayed for 4 years by the war from Islamic State.  Iran has the second largest reserves of natural gas in the world. The Trump administration's sanctions have led to a drop of Iranian crude shipments by 29% in 3 months and added to upward pressure on oil prices to take prices to $80 a barrel. This issue has implications for India and China, particularly India as it faces both higher prices for oil and the tight restrictions in purchase of Iranian oil. ...

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Daniel Yergin of consultancy firm IHS describes the geopolitical disputes in the Middle East between Russia, Saudi Arabia, and Iran that are leading to likely continued oversupply of oil in 2016, keeping prices in the $30-$40 range. Saudi Arabia is not likely to change its policy of going after market share, Venezuela is affected but lacks a voice in OPEC decisions, Russia continues its policies in Syria and Iraq under the Putin government affecting other Sunni states, and Iran following the lifting of sanctions is likely to ramp up supply to make up for its lost market share- all leading to an extended period of low prices. This situation benefits China, the European Union countries, India, Turkey and the U.S. in a period of slow economic growth in 2015-2016. Russia looks to use this period of low oil prices to shift to domestic industry after a period of rising imports when oil prices were high. The Saudis seeing their interests in the region threatened by Iran and Russia, and dissatisfied with the foreign policy of president Obama, see a policy of pushing for market share as appropriate in the current geopolitics of the region....