USA Russia & China in the Middle East : Alliances & Conflicts by Iakovos Alhadeff - HTML preview

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China-Russia

 

The main geopolitical objective of the Chinese is to ensure that in the next decades as much as possible of the oil and natural gas reserves of the Middle East will be available for China's energy security. This objective is very well served by the main geopolitical objective of the Russians, which is to send the energy of the Caspian Sea and the Middle East to China, in order to stop it from reaching Europe through Turkey. In addition the Chinese want to have good relations with Russia, because they count on Russia too for their energy security. Russia is a very rich country in oil and natural gas reserves, and the two countries share common borders (see following map).

 

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China and Russia recently signed a 400 billion dollar agreement, according to which Russia will supply China with approximately 35 billion cubic meters of natural gas per year, for the next 30 years.

 

The case of Turkmenistan is a very good example of Russian-Chinese cooperation. The Russians were pushing Turkmenistan to sell its natural gas through Gazprom, in order to prevent Turkmenistan from sending its natural gas to Europe through Azerbaijan, if the Trans-Capsian pipeline was ever built. At the following article of the Chronicles of Turkmenistan, titled “Is Russia Abandoning Turkmenistan”, January 2014, you can read that Russia is not buying the natural gas of Turkmenistan anymore, but she does not worry about it either, because Turkmenistan is now connected to China through pipelines and long term contracts leaving the European market to Russia.

 

http://www.chrono-tm.org/en/2014/01/is-russia-abandoning-turkmenistan/#comment-279404

 

With the red line in the following map, you can see what would be the Trans-Caspian pipeline, if it had it been built. This pipeline would connect Turkmenistan and Azerbaijan, but until December 2014 it has not been built. On the contrary Turkmenistan is already connected to China with a pipeline network that runs through Uzbekistan and Kazakhstan.

 

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The same has been the case with Kazakhstan. Kazakhstan does not have the rich natural gas reserves of Turkmenistan, but it is very rich in oil. Kazakhstan is also sending a large part of its oil production to China through pipeline networks, while the Americans and the Europeans are hopping that Kazakhstan can send a part of its oil to Europe through Azerbaijan and the Trans-Caspian pipeline.

 

Richest Countries in Oil Reserves

 

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Source: http://en.wikipedia.org/wiki/List_of_countries_by_proven_oil_reserves

 

As you can see in the relevant Wikipedia link, the above figures are taken from OPEC 2011 figures. These figures should be used as an approximation, because shale rock has been included for some countries i.e. Canada, while it has not been included for some other countries.

 

A natural question would be why Russia does not mind the countries of the Persian Gulf and the Caspian Sea supplying China with natural gas and oil, while at the same time she prevents them from doing the same thing for Europe? The answer is that the rich in oil and natural gas countries of the Persian Gulf and the Caspian Sea need to sell somewhere their natural gas and oil.

 

Of course it would be better for Russia if the countries of the Gulf and the Caspian Sea did not exist, or if they were very poor in natural gas and oil reserves. However the countries of the Gulf and the Caspian Sea do exist and they have some of the richest oil and natural gas reserves in the world. Therefore these countries will either sell to Europe or Asia, and for Russia it is much better if they sell to Asian countries than if they sell to the European ones.

 

Russia faces much less competition in Europe than she faces in Asia. Asian countries have many choices. They are next to the Persian Gulf, next to the Caspian Sea, next to Russia, and next to Australia. Australia is becoming a significant exporter of liquefied natural gas (LNG). Moreover Russia needs the countries of the former Soviet Union to depend on her for natural gas and oil, in order to be able to exert some geopolitical influence.

 

To better understand the Middle East, one must also take into account that the level of production is not only a function of the available reserves. There are also technological limitations about how much oil and natural gas can be produced from a given field. For instance there might be a natural gas field of 1 trillion cubic meters, which can only produce 1 billion cubic meters of natural gas per year. Therefore there is not only competition about who is going to control this field in the future, but there is also competition about who is going to buy the 1 billion cubic meters of natural gas this year.

 

A good example is the Nabucco pipeline, which was supported by the EU and the US, and which was supposed to transfer each year to Europe 30 billion cubic meters of natural gas from Azerbaijan through Turkey. The Nabucco plan was aborted because it was very difficult to find these 30 billion cubic meters of natural gas.

 

That's the basic story between Russia and China. Russia is trying to block the connection of the Middle East to Europe through Turkey, and that's very useful for the Chinese, since it leaves more resources for China, and less selling options for the countries of the Middle East and the Caspian Sea, and less competition means lower prices for the Chinese. From their part, the Chinese are trying to suck the region's resources, and this is very convenient for the Russians, because these resources will not end up in Europe competing with the Russian oil and natural gas.

 

However the above does not mean that the Chinese and the Russians do not have conflicting interests too. First of all Russia is a major exporter of oil and natural gas, while China is a major importer. Therefore China, similarly to the US and the EU, who are also importers, wants low oil and natural gas prices, while Russia wants high oil and natural gas prices, and this is something that greatly affects a country's policies.

 

In addition, the Russians and the Chinese very often compete for the same resources abroad, since both of them want to have access to foreign resources, the Russians in order to have more power as sellers, and the Chinese in order to achieve better deals as buyers. The case of Central Asia i.e. Turkmenistan, Kazakhstan and Uzbekistan is a good example. It is good for Russia that the oil and natural gas of these countries end up in China instead of Europe, but China's influence in these countries is rising, and that's definitely not good for Russia, because Russia used to be the dominant power in Central Asia.

 

Moreover China and Russia are two neighbouring super powers, both claiming the role of the regional leader. They are united when it comes in reducing the American influence in their neighbourhood, but that does not automatically resolve their own issues. After all it was only in 1969 that the two countries went to a mini war for the last time. On the question of whether China and Russia are friends or enemies, many analysts reply that they are the best “frenemies”. Three very good articles about the thorns in the Sino-Russian relations are the Financial Times article “Russia and China – Friends or „frenemies'?”, December 2014, the Economis's “China and Russia: Best Frenemies”, May 2014, and Huffington Post's “Russia-China Gas Deal”, May 2014. You can read these articles at following links.

 

http://www.huffingtonpost.com/aurelia-condrat/russia-china-gas-deal_b_5395214.html

 

http://blogs.ft.com/beyond-brics/2014/12/11/guest-post-are-russia-and-china-friends-or-frenemies/

 

http://www.economist.com/news/leaders/21602695-vladimir-putin-pivots-eastward-should-america-be-worried-best-frenemies