The world according to Trump: Russia vs Saudi Arabia
The strongest new geopolitical market driver now comes from France
29 Nov 2016
Whatever foreign policy decisions may lie in store from Donald Trump, important global counterparties are already positioning themselves for potential outcomes – with Russia and Saudi Arabia offering an instructive contrast that has a bearing on the global oil market and geopolitical tail risks in addition to those countries’ domestic assets.
- With Trump’s campaign rhetoric presenting potential threats for Saudi Arabia and gains for Russia, the two countries will adopt contrasting stances in their areas of vital interest: active Saudi counter-measures in the Middle East compared to a cautious long Russian game in western Eurasia.
- In this environment, the Saudis will push all the harder for OPEC action to support the oil price, despite the free-riding of Russia and Iran – making Russia the main net beneficiary.
- Geopolitical logic points to a fresh chapter of danger surrounding Israel.
- Regardless of whether the future Trump administration offers Russia the prize of a new European security architecture, a more moderate re-rating of Russian asset valuations – especially equities – is highly probable as a result of the success of François Fillon in the French presidential primaries.