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

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USA-China

 

The most interesting duet in the Middle East is by far the USA-China one. USA and Russia do not presently have much room for cooperation, while China and Russia have plenty. However USA and China have room for both cooperation and confrontation. While the global interests of US and China are moving in opposite directions, it is possible that the realities of the Middle East will force the two countries to reach a minimum consensus for cooperation.

 

As I already said the US is no longer very dependent on the oil of the Middle East, and it will become even less dependent in the future, while exactly the opposite is true for China. As you can read in the following article of the National Public Radio, titled “U.S. Rethinks Security As Mideast Oil Imports Drop”, November 2012, the Americans are facing a great dilemma. On one hand they do not want, and cannot afford, to finance their military presence in the Persian Gulf, in order to safeguard oil that mainly goes to Asia. On the other hand the Americans do not want the Chinese to have total control of a region that is of such strategic importance, as it is the case with the Middle East.

 

http://www.npr.org/2012/11/14/165052133/u-s-rethinks-security-as-mideast-oil-imports-drop

 

The Americans realize that the Chinese need the region to secure their energy supplies, in the same way the Americans did in the past, and they have no problem with that. What they want from the Chinese though, is to stop backing the Russians all the time, and share with the US a part of the military cost associated with the Middle East. Moreover the Chinese would have to accept the American plan of connecting Middle East to Europe through pipeline networks, something that the Russians do not accept at the moment.

 

The Chinese have already made a move towards this direction, by abandoning the plans for the Iran-Pakistan pipeline, as you can read in the following article of the Express Tribune, titled “Gas import:  China abandons IP project, eyes TAPI pipeline” , April 2014. As you can read in the article the Chinese are willing to go for the TAPI pipeline (Turkmenistan-Afghanistan-Pakistan-India) instead of the Iran-Pakistan one. The Express Tribune is Pakistan's only international newspaper, and it cooperates with the international edition of the New York Times.

 

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In a strategic move, China has shelved a plan to be part of the Iran-Pakistan (IP) gas pipeline that faces the threat of US sanctions and has come up with an offer to join the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline to meet its growing energy needs.

 

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Earlier, the official added, China had expressed interest in becoming a member of the IP project, but changed its stance later as the future of the venture looked uncertain in the face of influence from a Gulf Arab country and threat of US sanctions.

 

http://tribune.com.pk/story/701979/gas-import-china-abandons-ip-project-eyes-tapi-pipeline/

 

If the Iran-Pakistan pipeline is not built, it is much easier for the Americans to send Iranian natural gas to Europe. Moreover there have been some efforts to achieve some minimum cooperation between the navies of the two countries, as you can read in the following Wall Street Journal article, titled “China Pushes Limits to Closer Ties With U.S. Military”, July 2014:

 

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China is seeking greater access to U.S. aircraft carriers and guidance on how to operate its own first carrier, the Liaoning, testing the limits of a newly cooperative military relationship the two sides have tried to cultivate in the past year.

 

The latest Chinese request came last week when U.S. Adm. Jonathan W. Greenert, chief of naval  operations, visited China to explore new areas of cooperation, despite recent maritime tensions and the presence of an uninvited Chinese spy ship at naval drills off Hawaii.

 

http://www.wsj.com/articles/china-pushes-limits-to-closer-ties-with-u-s-military-1405964884

 

In the first three paragraphs of the following Wall Street Journal article, titled “Middle East Oil Fuels Fresh China-U.S. Tensions”, October 2013, you can read that China buys from the Middle East more oil than the United States, and this causes tensions between the two countries, because the Americans feel they are paying to protect oil that ends up in Asian countries, and they are pushing China to back a bit more their foreign policy.

 

Even though the article does not say so, by “backing the American foreign policy”, it means to adopt a more neutral stance between the US and Russia, and to help with the connection of the Middle East to Europe. Don't forget that China can influence countries like Iran and Syria, which are beyond Washington's influence. In the past, China has backed all of Putin's policies, like Qaddafi in Libya, Assad in Syria and Sisi in Egypt.

 

However China did so in a more diplomatic and a less military way than Russia did. The article also says that China does not have the military means to safeguard the Persian Gulf by herself, and that Zhang Guobao, the former head of the Chinese National Energy Association, said that it is better for the Chinese if the Americans keep safeguarding the Middle East.

 

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China is overtaking the U.S. as a buyer of Middle East oil, adding fuel to diplomatic tension between the nations over security in the region.

 

China surpassed the U.S. as importer of Persian Gulf crude several years ago, by some measures. Now it is on track to overtake the U.S. this year as the world's No. 1 buyer of oil from the Organization of the Petroleum Exporting Countries, the largely Middle Eastern energy-exporting bloc.  The turnabout has added to tensions because it leaves the U.S. military securing China's growing oil shipments in the region at a time Beijing resists U.S. pressure on it to back American foreign policy in the Middle East.

 

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For years, China and other oil-consuming nations have benefited as Washington spent billions of  dollars a year to police chokepoints like the Strait of Hormuz and other volatile parts of the Middle East to ensure oil flowed around the globe.

 

But the rise of North America's shale oil and gas industry has put the U.S. on track to pass Russia this year as the world's largest combined producer of oil and gas, if it hasn't done so already, according to a recent analysis of global data by The Wall Street Journal.

 

That rise, combined with flat U.S. oil consumption, is making America far less dependent on imported oil, including from the Middle East, even as China's reliance on the region's oil grows.

 

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Signs of tension are surfacing. Beijing has asked for assurances that Washington will maintain security in the Persian Gulf region, as China doesn't have the military power to do the job itself, according to people familiar with recent discussions between the countries.

 

In meetings since at least last year, Chinese officials have sought to ensure U.S. commitment to the region isn't wavering, particularly as the Obama administration has pledged to rebalance some of its strategic focus toward East Asia, said people familiar with those discussions.

 

In return, U.S. officials have pressed China for greater support on issues such as its foreign policy regarding Syria and Iran. U.S. officials in private discussions have pressed China to lower its crude imports from Iran, for example, according to a person with knowledge of the discussions.

 

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At an April Brookings Institution conference in Washington, D.C., when the former head of China's  National Energy Administration, Zhang Guobao, was asked whether China could assume a greater  role in protecting the region's shipping lanes, he responded: 'Why don't the Americans do the job for now.'

 

 http://www.wsj.com/articles/SB10001424127887324755104579073283948517714

 

It is not only the economic cost that scares China when it comes to safeguarding the Middle East. China also worries about the geopolitical costs associated with becoming a referee in the regional oil and natural gas wars. Until now the Chinese have been backing Russia, but they did so mainly with diplomatic means. If however they become a major military power in the Gulf, the Chinese will have to pursue a more active policy, and they will lose the advantage of appearing as a peaceful businessman, which is very important in order to work with all the countries of the region. This is an advantage that is not enjoyed by the Americans, the Europeans or the Russians.

 

On the other hand the Chinese cannot permanently avoid a significant military presence in the region, because they need to protect their multi billion dollar investments. In the following Financial Times article, titled “China's strategic dilemma in the Middle East”, August 2014, you can read that if the Americans stick to their new doctrine of no more American “boots” in the Middle East, the Chinese will not have any other choice than to increase their military presence.

 

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The third option is hardly more palatable. That is to recognise that as a trading nation China has a direct stake in the stability of the countries with whom it conducts its trade, especially in key raw materials. If, as seems likely, the US continues to resist the idea of putting American boots back on the ground in the Middle East, the Chinese could find themselves forced, however reluctantly, to become a guarantor of stability for the regimes which matter to them. From that starting point the slippery slope to greater engagement begins. But as the Americans – once the nation most hostile to imperialism –

has found over the last century, empires are often created unintentionally, as the cumulative result of immediate responses to one event after another.

 

http://blogs.ft.com/nick-butler/2014/08/17/chinas-strategic-dilemma-in-the-middle-east/

 

At the following Forbes article, titled “What Happens When America No Longer Needs Middle East Oil?”, March 2012, you will read that the Americans look like the English did in the 1970's, when they could no longer finance their military presence in the Middle East, and they left this role to the United States. The article also says that a decreasing American presence in the region will mostly benefit Iran, which will emerge as the strongest regional power, while Saudi Arabia and Israel will be the losers, because they will not have the American protection anymore. The Chinese will also lose because they will have to assume a significant cost for safeguarding the region.

 

http://www.forbes.com/sites/lorenthompson/2012/12/03/what-happens-when-america-no-longer-needs-middleeast-oil/

 

Many people do not realize that it is very easy for wars to break out in the Middle East, because the regional powers are competing so hard about who is going to sell more oil and natural gas. If there is not a large foreign power in the region, whether that is USA or China, the likelihood of wars will be higher and not lower. Therefore sooner or later China will have to be a big military power in the region irrespective of whether she cooperates or competes with the US.

 

The US and China will have to decide how they are going to resolve this dilemma. None of them want to assume all the military cost required for safeguarding the Gulf, but at the same time they are the biggest importers of oil in the world, and they have a common interest in keeping oil prices low. The problem is that they are not allies as was the case with the English and the Americans in the 70s, and it is difficult for them to cooperate. In the following article of the CNBC, titled “China's Arab march”, June 2014, you can read that as the US will be decreasing its military presence in the Middle East, China will have to increase hers, in order to protect her multi-billion dollar investments in the region.

 

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Unsurprisingly, energy has been a key factor in economic ties with the Arab world. From 2004 to  2013, China's crude oil imports from Arab countries grew by more than 12% annually, on average,  reaching 133 million tons per year. And China's 'march west' strategy furthers its goal of safeguarding access to these resources. As the director of the State Council's Development Research Center, Li Wei, pointed out in February, at the current rate, China will be consuming 800 million tons of oil annually, and importing 75% of its petroleum, by 2030.

 

In this sense, China's trajectory contrasts sharply with that of the United States, where the rapid growth in output of shale oil and gas, together with energy-saving measures, has brought energy  independence closer than ever – a point that President Barack Obama emphasized in his most recent  State of the Union address. In fact, according to the US Energy Information Administration, China  surpassed the US as the world's largest net oil importer earlier this year.  Moreover, the US is gradually disengaging strategically from the greater Middle East, creating a  vacuum that China seeks to fill. To succeed, China will need to become more attentive to the region's complex dynamics; find creative ways to participate in conflict-resolution efforts; and respond  enthusiastically to Middle Eastern governments' growing desire to connect to Asia.

 

http://www.cnbc.com/id/101792181

 

In the following article of Al-Monitor, titled “Navy exercises bring Iran, China closer”, October 2014, you will read that on the 20th of September 2014, China sent warships in the Persian Gulf, for a joint exercise with the Iranian Navy, and this was the first time that Chinese warships entered the Persian Gulf.

 

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On Sept. 20, China dispatched ships to the Persian Gulf for a joint exercise with the Iranian navy  —  the first time that Chinese warships have ever sailed in the Gulf. The Chinese missile destroyer  Changchun and missile frigate Changzhou of the 17th Naval Fleet  took part in a five-day joint training drill, the aim of which was 'establishing peace, stability, tranquility and multilateral and mutual cooperation,' according to Adm. Amir Hossein Azad, c ommander of Iran's First Naval Zone.

 

http://www.al-monitor.com/pulse/ru/originals/2014/10/iran-china-navy-persian-gulf-us.html

 

At the following article of the National Interest, titled “Time for a U.S.-China Partnership in the Middle East”, September 2014, you will read that while the Americans and the Chinese are globally moving in opposite directions, the Middle East is an exception, and there is room for an American— Chinese cooperation.

 

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Under President Xi Jinping, China and the United States have pledged to forgea new type of great- power relationship. To date, this effort has largely focused on strengthening bilateral cooperation in the Asia-Pacific. This is sensible insofar as Asia is the most important region for both the United States and China, and especially for interactions between them. At the same time, it is also the region where their interests are most at odds, and thus where cooperation is most likely to remain elusive.

 

By contrast, America‘s and China‘s major interests in the Middle East are nearly perfectly aligned.  Foremost among these is the free flow of oil. Since at least the 1970s, the free flow of oil in the Persian Gulf has been a core U.S. national interest. Although the United States is becoming increasingly  energy independent, it s interest in a prosperous global economy makes the free flow of oil a continued priority.

 

Even as America‘s dependence on Middle Eastern oil wanes, China‘s dependence on it grows. This  year China is expected to surpass the United States as the largest petroleum importer, and Beijing will  soon get over 60 percent of its oil supplies abroad. The Middle East will remain the focal point of China‘s efforts to secure foreign oil. Already, the region accounts for over half of China‘s oil imports.  Despite China‘s best efforts to diversify its energy sources, Beijing‘s spiking demand will force it to rely on the turbulent region for the foreseeable future. Giving China a stake in the region is essential for reducing Beijing‘s sense of vulnerability.

 

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Still, Beijing can complement U.S.-led political and military engagements. For example, China  maintains working relationships with a number of important governments in the region that the United States shuns, such as Syria and Iran. The Palestinians also view China as a more impartial actor than the United States, and Beijing‘s active involvement in the Middle East peace process could help  unfreeze negotiations.

 

Similarly, while China cannot independently support long-term military interventions in the Middle  East, it will be increasingly capable of participating in U.S.-led operations in the years ahead. This would not only reduce the burden America bears for these interventions, but would also help to  improve mil-to-mil ties between China and the United States.

 

 http://nationalinterest.org/feature/time-us-china-partnership-the-middle-east-11318

 

The good thing is that USA and China are two of the richest countries in the world in terms of shale rock. The new production technologies allow the production of oil and natural gas from shale rock, which might relieve some of the tensions in the future. The following table shows the richest countries in the world in shale rock as given by Wikipedia.

 

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http://en.wikipedia.org/wiki/List_of_countries_by_recoverable_shale_gas

 

I must also say that even though China and the US will be the two big rivals in the 21st century, there are also some factors that bring them together. The Americans are a much bigger trading partner than the Russians for China. Moreover, the US and China are major importers of oil, and contrary to Russia they both want low energy prices. Therefore the Americans, the Chinese and the Europeans, want the countries of the Middle East to produce as much oil as possible, while the Russians want the contrary.

 

In the past the Americans managed to keep oil prices low, through their alliance with Saudi Arabia. Now that the Chinese are the big customer of the region, and they are more popular than the Americans, they have to use their influence to make sure that as much oil as possible flows from Saudi Arabia, Iraq, Iran and the other countries. However in the same way that an appetite for low oil prices bring the US and China together, an appetite for high oil prices bring Saudi Arabia, Iran, Russia and Qatar together.

 

The oil and natural gas producing countries have a motive to act as a cartel, in order to reduce production and increase prices. Actually that's the role of OPEC (Organization of the Petroleum Exporting Countries). As you can read in the first two paragraphs of the following Guardian article, titled “Russia, Iran and Qatar announce cartel that will control 60% of world's gas supplies”, October 2008, Russia, Iran and Qatar are holding 60% of the global natural gas reserves, and they are making efforts to create a natural gas cartel, similar to what OPEC is for oil.

 

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Western concerns about global energy markets hit new heights last night when Russia, Iran and  Qatar said they were forming an Opec-style gas cartel.

 

The move by the three countries, which control 60% of the world's gas reserves, was met with  immediate opposition from the European commission, which fears the group could drive up prices‖.

 

http://www.theguardian.com/business/2008/oct/22/gas-russia-gazprom-iran-qatar

 

It is very important to take into account the common interests that the importing and exporting countries have when it comes to prices. Countries that export oil and natural gas compete about their market shares, but at the same time they want high energy prices. Countries that import oil and natural gas compete about who is going to control the rich in oil and natural gas regions, but they all want low energy prices. At the following two CIA tables you can see the biggest importers and exporters of oil in the world.

 

Largest Exporters of Oil

 

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https://www.cia.gov/library/publications/the-world-factbook/rankorder/2242rank.html

 

Largest Importers of Oil

 

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https://www.cia.gov/library/publications/the-world-factbook/rankorder/2243rank.html

 

Therefore to analyze the Middle East one needs not only to take into account the antagonism between oil and natural gas exporters, but also the common interests between them. And the same is true for the countries that are oil and natural gas importers. At the following Itar-Tass article, titled “Lavrov goes to Saudi Arabia to discuss situation in Syria, Iraq”, June 2014, you can read that Saudi Arabia and Russia were discussing the possibility of cooperation between the two countries in the energy sector, including nuclear energy. Itar-Tass is a news agency that belongs to the Russian Federation.

 

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The two countries also develop economic cooperation, including in the energy sphere. On June 18,  Russia and Saudi Arabia agreed on a draft intergovernmental framework agreement on cooperation in  peaceful uses of nuclear energy and subsequent steps in preparing the agreement for signature.

 

http://itar-tass.com/en/russia/736939

 

Saudi Arabia is the country that together with the Americans fought the Soviet Union for decades. And as soon as the Americans are not the best customers and they need the Iranians, the Saudis and the Russians are trying to cooperate against them, while the Iranians who have traditionally been Russian allies, want to sell oil and natural gas to Europe, something that would hurt the Russian interests. That shouldn't surprise anyone, because international relations are about money and not about friendship.