KSA

In 1973 the petrodollar agreement was set up between Kingdom of Saudi Arabia (KSA) and the USA. The Saudi's agreed to only sell oil in dollars and the US agreed to offer military protection to the Saudi's. The relations between the US and KSA are now changing and KSA is joining forces with China to sell oil in Yuan. This means they will lose the US protection and this opens the door for Iran to try to take over the Saudi oil fields. KSA has military equipment from the USA and Iran has equipment from Russia. All of this equipment needs a constant supply of spare parts and the USA will refuse and Russia is unable so both of these countries are going to fight it out without the use of modern war equipment. This will disrupt the oil shipments from the Middle East and will spell disaster for China. China is dependent on imported oil and they currently get 85% of their oil from the Middle East and the rest from Russia and Russian supplies are in jeopardy. China is already suffering from a slow economy, high unemployment, a collapse in the real estate market, businesses from around the world pulling out, lack of young people, and too many retired people. The danger is that China has a one man rule and if he thinks he is losing his power he may resort to attacking Taiwan to divert attention away from the problems at home. The US must quickly start producing high end chips to replace the supply that currently comes from Taiwan.