I had previously mentioned that US President Donald Trump has a timetable on tackling the coronavirus as he's really afraid of the pandemic and can't afford to let oil prices slide.
So the so-called oil price war may just be a ploy by the United States and Saudi Arabia or even Russia, and the real target may be Iran, which has been badly affected by the deadly outbreak.
One reason for this assumption is that Secretary of State Mike Pompeo visited Saudi Arabia two weeks before the Kingdom launched the price war and he said both countries would focus on the Iranian threat. Therefore, the Saudi price war can't be aimed at the United States.
So was it aimed at Russia? Well, if Russia had not participated in the G20 video conference held by Saudi Arabia, then we would be right to worry about Saudi Arabia's ties with Russia. But not only did the G20 talks go well, they also revealed they would launch a US$5 trillion bailout package.
This shows that Saudi Arabia and Russia are united in wanting to limit the impact of the pandemic on the economy and relations between the two oil exporters are by no means as bad as imagined.
And though the United States has been wooing Saudi Arabia and Russia to reduce oil production, it appears that the three nations are actually targeting Iran.
Before a short-term agreement was reached between Saudi Arabia, Russia and the United States, Trump warned Tehran not to connive with its partners and execute sneak attacks on US troops and assets in Iraq while America grapples with epidemic, or else the consequences would be serious for Iran.
After warning Iran, Trump said that Saudi Arabia and Russia would cut oil production, showing that the United States was indeed affected by the pandemic and had no time to engage in a battle with Iran.
Of course, if oil continues to stay low, it can reduce inflationary pressures in the United States in theory, as well as reduce the burden on American citizens, while helping the economy or boosting the Fed's hand in monetary easing.
But since major nations have cut interest rates to nearly zero, and the pandemic has hit the global economy, inflation is no longer a worry for any country, so oil need not stay low any more.
As a result, prices rose more than 30 percent last week, and apart from reflecting that prices may have bottomed out, it also showed that America is no longer focusing on Iran as its top priority is addressing the economic impact of the outbreak.
Therefore, the United States is also unlikely to slap any sanctions on China, even if the pandemic was caused by some country.
China and the United States may have a lot of differences but America won't do anything to China for now, as it wants to prevent its economy from slumping into a prolonged recession,
Meanwhile, China too needs to solve its economic woes, so it is believed that Beijing will not take on trade problems with the United States at this point in time.
China should also realize that the outbreak has boosted, rather than dented, Trump's popularity at home and that he still has a good chance being re-elected for another four years, come November.
So don't believe that Trump may be dragged down by crisis and step down or else, knowing how Trump behaves, he will inflict double the pain in retaliation for what he has suffered today, once he is re-elected.
Andrew Wong is chairman and CEO of Anli Securities
