In a chart-pack from two weeks ago, we started to point to a pivot from Beijing in two arenas: the first pertaining to an accelerated reopening out of Covid-Zero, and the second in regards to a strategic reset in the world of geopolitics. As former PM of Australia Kevin Rudd emphasized at an event of the Asia Society, Xi Jinping’s speech at the G20 in Bali marked a shift in rhetoric towards geostrategic adversaries. Xi’s speech was later followed by China’s foreign minister Qin Gang who talked about “being deeply impressed” by his time in Washington. This is a 180 on multiple fronts and it marks a pivotal change in the demand landscape for commodities. Unlike western nations that responded with demand stimulation during the heights of Covid, Beijing mostly based its response on societal measures. As a result, more accommodative policies can be used in lieu of the current reopening and thereby lead to increased consumption. What’s more, John Hess from Hess Corp recently suggested that he sees U.S. production plateauing in 2025/26 at around 13 – 13.5m bbl/day (up from the current 12.2m.) With little spare capacity from OPEC+ and questionable production stability from Russia (Urals trading at ½ of Brent), there’s no reliable swing producer. Thus, while the recession conversation in the western world may adversely affect upside price swings, a return of global travel combined with underinvestment could lead to a material change of the supply/demand balance.