Quote Originally Posted by jk View Post
china's recent $400B deal with iran gives it primacy in development of iranian energy, gives it a guaranteed discount from world prices, and - importantly- give it the privilege of paying in local currencies, i.e. rmb, instead of dollars. similarly, its arrangement with russia allows settlement in rmb or rub. thus, how much world prices affect the prices paid by china to these two suppliers is a direct function of the rmb exchange rate, which can be manipulated by the pboc.

another interesting note is that recently there was an agreement signed between saudi and china that was to have made ksa china's largest supplier once again. the terms are not, to my knowledge, public. one has to wonder whether china would have made such a deal, given its arrangements with russia and iran, if ksa insisted on usd payment. further, it points to at least one motive for iran and/or russia to demonstrate the unreliability of saudi sourcing.

[sorry, just realized that this is mostly repeat of #12 above, but responds to your comment re assessing china's concern about "rising energy prices." if they can print rmb, and pay in rmb, perhaps the global reference is not so important.]
If China has a substantial long term deal with Iran then that sounds like a really logical(and integral) part of China’s One Belt, One Road initiative over the next 25-50 years.

Iran’s large population would be a substantial potential export market for Chinese goods/services and Iran’s energy shipped overland to fuel China would be safer than vulnerable SLOCs.

It’s hard to tell how this will play out.

I suspect Iran’s increasing aggression is linked to the increasing pain of sanctions

https://www.bbc.com/news/world-middle-east-49760200
“Iran's oil exports are close to zero, its revenue stream is drying up, and its reserves of hard currency are thought to be sufficient only for several more months. The fall in the value of its currency has pushed the inflation rate to 40% and almost halved the purchasing power of Iranians, who are finding it difficult to make ends meet.”








But the Chavez/Madura Venezuela regime has endured despite horrific deprivation for citizens, likely in part due to Russia/Chinese support.

The same could be said with Zimbabwe and it’s Chinese nexus

Even if currently enduring substantial pain, Iran likely has much more capacity to endure sanction hardship if Zimbabwe/Venezuela as analog Chinese supported pariah nations are anything to go by.

It’s a funny world.

Iran and the US governments hate each other.

Iran and Saudi governments truly hate each other.

Iran and China aren’t exactly allies, but share “adversaries of adversaries as allies of convenience”.

Perhaps the Russia/Turkey alignment, thought impossible just a few years ago due to very long simmering feuds and now on track to be geopolitical BFFs are an indication of tectonic change, but I seriously doubt it.

But I can’t see a Nixon goes to China moment exploiting the Sunni/Shia divide like Nixon did between Soviet/Chinese communism.

Perhaps Putin in Turkey was it, or the start of it?