The never-ending power play between US and China

It is worrying that the US and China are not working to engage and collaborate with each other but instead remain locked in a wrestle for power, according to Dan Yergin, vice chairman of IHS Markit. He was weighing in on a Reuters report that cited sources saying U.S. President Donald Trump is planning to add China’s national offshore oil and gas producer, CNOOC, to a defense blacklist.

The move may be part of the notion of “decoupling,” or a disengagement between the two countries.

Yergin told CNBC’s “Street Signs Asia” that he thinks right now, the Trump administration is putting down a series of landmines almost, of difficulties for a Biden administration. Bringing stability to the US-China relationship is the “biggest geopolitical issue” that President-elect Joe Biden will have to face.

On another note, Yergin also discussed the outlook for the oil market as OPEC+ considers an extension to output curbs. OPEC+ is made up of members from the oil-producing group plus their non-OPEC allies. He think it’s really a struggle right now between the vaccine rally in prices and the coronavirus impact on demand.

“That’s what’s at the heart of the battle that’s going on right now with OPEC and non-OPEC,” he told CNBC. Oil prices are anticipating a recovery in demand and pointed to a pick up in US demand before virus cases started to increase again.

The Chinese demand today is several hundred thousand barrels a day higher than it was this time last year, and it’s the same in India.

Yergin also said even though work patterns and jet travel will change, he thinks we are going to see demand come back to what it was in 2019 sometime in 2022, 2023.