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Saudi Arabia is Critical for Western Nations

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Saudi Arabia and the US

Saudi Arabia is an important ally for the US (SPY) in the Middle East. Most of the terrorist activities against the Western nations come from the Middle East. A significant portion of the crude oil imports for the US and European countries (FEZ) comes from the Middle East and OPEC (Organization of the Petroleum Exporting) countries. Since Saudi Arabia leads OPEC, it ensures a regular supply of crude oil to these markets. Saudi Arabia is also a strategic point to fight against terrorism in the Middle East.

The presence of Russian forces in Syria led to a complex Eurasia power equation. Iran is backing Russia. NATO, led by the US, needs Saudi Arabia to confront Russia (RSX).

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EU needs a partner to end Russia’s monopoly

The European Union (FEZ) needs a stable supplier for its regular needs. A country with so many differences can exploit it in the future. Natural gas is a vital component of energy. The European continent is situated close to the North Pole. During part of the year, the gas supply is essential. As a result, the European Union’s dependence on Russian energy exports isn’t avoidable.

The above chart shows the major pipeline from Russia to the European continent.

Even substituting a small need with another nation gives the European Union high bargaining power over the supplier. As a long-term strategy, the Eurozone might limit its dependence on Russian energy exports. It might bring other players into this market. It could include Iran, Saudi Arabia, Qatar, and other OPEC countries in the future as potential gas suppliers to the European Union. If OPEC gets divided, then Russia and Iran can rule the natural gas market. Russia and Iran account for 35.6% of the world’s proved natural gas reserve.

Gazprom PAO (OGZPY) is the leading supplier of natural gas to the European market. Gazprom PAO and Lukoil (LUKOY) operate with a production mix of 85% and 13% in natural gas. Chevron (CVX) is the US counterpart. It has a production mix of 33% in natural gas.

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