Strategic Pulse

Geopolitical Securitization of Energy

Geopolitical, Oil, Energy, Securitization, Shale Gas
Ammar Alam
Written by Ammar Alam

US interest in the Middle East

Middle Eastern oil has entranced global supremacies and global capital since the early twentieth century. Its magnetism has been particularly powerful for the United States. The American romance began in the 1930s when geologists at work for Standard Oil of California discovered commercial quantities of oil on the eastern shores of Saudi Arabia. In the following years, the initial enchantment turned into an obsession. Not long after World War II, it became unmistakably clear that oil was not just a trendy industrial good, it was way more than that. The most celebrated event in history was when Franklin Roosevelt hosted Abd al Aziz Ibn Saud, the founding monarch of Saudi Arabia, aboard the USS Quincy in February 1945.The meeting permanently linked middle eastern oil to US national security and forged one of the most important strategic relationships of the twentieth century, in which Saudis would supply low-priced oil to global markets as a substitute for US protection. A deal was made and so too a future time bomb.

United States had two paramount interests in the twentieth century. One was to maintain the security in Saudi Arabia and in the entire Persian Gulf. Second, was to maintain the flow of Middle Eastern oil. This is evident in the foreign assistance act between 1962 and 2010 committed to support the middle-east with an estimated 4936.9 mill USD equal to one-third of the country’s debt. Moreover, among the top 15 countries profiting from US military and economic assistance, seven are located in the “greater Middle East” along with Sudan and Ethiopia which play imperative roles in the geopolitics of the area. One of the chief questions that engaged Western experts in the 1960s was to understand the possible intentions of the Soviet Union in the Middle-east, especially those concerning oil matters. In the late 1960s, some specialists reasoned that, conceivably, a domestic oil crisis was about to knock at the Soviet Union door, and that Moscow wanted to gratify its energy desire through a more piercing presence in the Middle East.

The Middle East already embodies a secondary source for the US oil imports. Moreover, an increase in demands has been satisfied through sources other than those in the Persian Gulf and an active energy collaboration between Canada, Mexico, and the US has been initiated; however, this does not weaken the US’s position in the Middle East. The Reagan administration highlights how the increased demand was skillfully fulfilled, most of the burden of which had to be borne by the Middle Eastern countries. In hindsight, this did not alter the US’s disinterest in the region. In fact, if anything, it inspired the Soviet Union to instigate a war in Afghanistan against the Mujahidin and the US’s covert reaction with the weaponry supply through the Pakistani intelligence agencies.

To some extent, the US was aware that the 1986 boom was not an evergreen field and that sooner or later the US would start consuming resources again. Moreover, the reason for the presence in a resource-rich region steers from imperial logics of power. Purchasing access to resources is as important as preventing antagonists from doing the same. Following the idea of fragmented supremacy, the notion that a resource independent US could allow free movement of new powers in the Middle East is implausible. Initially, the USSR acted in a similar way in the post-World War II period. Although Russia was always energy independent, it continually sought access to the Gulf in relation to the Russian oil offensive. In terms of supply security, a politically steady Middle East is also a Middle East capable of providing a secure supply of resources to customer states. There is a very lucid relation between Middle East stability and low energy prices and remarkably, the biggest achievements in the pacification have been accomplished during periods of low barrel prices. The Camp David Accord of 1978 and the Oslo Accord of 1993 are both major examples that corroborate the relationship mentioned above.

This is due to both the regional and international decrease in oil prices which seems to agitate the building of nationalist and military sentiments. At a local level, high prices of fuel can exert an iron influence due to promotion of military agendas caused by ill-directed administration of rents and by the increase of opportunity costs of rebellion. It is possible that nationalist sentiments propelled by oil rents may generate transnational conflicts as happened for the Iran-Iraq war which began in the early 1980s. At the international level, oil rents may finance the reach of regional and great powers on the Israeli-Palestine conflict, weakening the region. The ties between Iran, the Shiite Crescent, and the armed groups in Southern Lebanon and in Gaza demonstrate how the regime of Tehran, stabilised by oil rents, can influence the ailment of the region.

Lower oil prices act as pacifiers in the Middle Eastern context. The 1986 price slump particularly influenced the Soviet retreat from the Afghanistan and the end of Iran-Iraq fiasco. The 1991 Iraqi-led invasion of Kuwait was related to the poor status of Iraq’s finances after the long conflict with Iran and possibly proves that the aggressive path followed by Saddam Husain was due to the years of increase in oil prices. After 1986, for fifteen years, the influence of Arab countries was undeniably lower than that before the price glut. Notably, by the end of the 1990s, Israel and many other Muslim countries had managed to open diplomatic and commercial relations and had even established an outpost in Oman.

On this magnitude, the effect of non-OPEC oil production passing the OPEC production had a devastating impact on the reach of the petroleum cartel. Oil production in the central US states has increased so much that some commentators have labelled it “Saudi America”. In this context, OPEC countries have reduced their production by 2012. In terms of contemporary amiability of the military operations in the Middle East, the essential issue is that of Iran’s nuclear agenda.

Alternatively, considering both the element of inflated oil prices and the general impact of alternate energy resources; the quotation of oil barrels is still very low as compared to the general situation of the region. Notwithstanding, there have been civil wars in Libya and Syria, and uprisings involving important hydrocarbon-producing countries such as Saudi Arabia, Bahrain and Iran. By April 2013, prices had dropped below 100USD. It limited both the rents for Iran and barred oil prices from shooting when rebellions exploded.

Additionally, the creation of alternatives to the Iranian oil poses a direct warning to the Tehran regime because then it makes military selections feasible. Moreover, a possibility of flow disruption from Iran would directly affect its purchases such as from China. For this reason, the UN started considering a new set of approvals between 2002-2012; major portions of the negotiations involved convincing China to join the imposition. The worried movements of Moscow in the region also signal the possible success of the new US strategy. As in the previous decade, the Russians had no direct interest in the oil of Middle East but still believed that retentive influence in the Middle East is a cementing factor for its establishment as a world power. Russia had taken a precise stance in the sectarian fights between different Islamic sects developed in the middle east alongside the Arab revolts, and Russia sided with the Shia population. The Sunni component of the Middle East world, namely Saudi Arabia, Jordan, and Egypt, enjoys continuous support from the US. The Russian assistance of Iran’s civil nuclear program, as well as weaponry supply to countries in the region of Shia leadership, belongs to a political pattern that connects Moscow with Tehran, Syria, Southern Lebanon, and Gaza due to different intents. Among them, there is a goal of preserving a navy base on the Mediterranean on the Syrian coast of Tartus and of influencing the peace process between Israel and Palestine.

Contemporary Russia in the Middle East is pursuing a twofold geopolitical goal that is quite suggestive of Soviet times of direct and indirect kind. The indirect kind alarms the possibility of affecting the political reach of competing powers. In this case, as gas is not a perfect substitute for oil hence it is still essential that Russia set parameters to the freedom of operation of oil-consuming countries.

This ruling is not only concerned with the west but it is meant also to keep an eye on China. Russia is actively supplying Beijing with resources but containing the political freedom of China in territories of alternative supply which allows Russia to enjoy a prospective market advantage.

On a larger extent, it is still possible that unexpected disruption in supplies from territories outside of the Middle East will make the region more central to the global energy system and in this sense, Russia’s moves represent a geopolitical venture that may recompense in the years to come. Russia seems to have learned the lesson that the pendulum of energy supplies following long-term economic and political fluctuations may play at its advantage again. As for its undeviating goals, retaining control of the port of Tartus in Syria serves the purpose of being able to patrol the new frontier of carbon developments between Cyprus and Israel. Tartus allows Russian vessels to deploy maintenance operations, refuel, and replenish stocks without having to navigate all the way back to the Black Sea especially bearing in mind that the Dardanelles is a bunged waterway with ships having to wait even days before their turn to passage.

Even in 1945, one of the blatant intents of Stalin while negotiating the end of the Iranian crisis was to have the Dardanelles under Soviet Control. Moreover, in recent times, a set of new gas discoveries in the waters of Israel and Cyprus ignited Russian interest for the Mediterranean even further. Israeli waters may host enough gas to satisfy its domestic demand for fifty years. These discoveries may exert a fundamental impact on the local geostrategic assets. Israel may grow independent from Egypt’s gas supplies and shift its supply chain to Jordan.

A paper by the conservative Jerusalem Center for Public Affairs speculates that gas suppliers may represent competition even for Russia in the European and Asian markets. From Eilat on the Red Sea, a regasification terminal may allow Israel to export gas to the global markets. Such an opportunity has been connected to the unprecedented decision by Iran to deploy naval exercises in the Red Sea. The paper claims that an export structure operating directly from Eilat markets in Asia would face a rising strategic problem: Iran’s increasing naval presence in the Red Sea. This will require Israel to establish and expand a fleet in the Red Sea as well as significant expansion in the size and capability of its Mediterranean fleet. In contemporary times, a resource-rich Russia is therefore still trying to retain its presence in the Middle East. The task has become more complicated than the part in particular because some Muslim territories are not part of a unified federal entity with Russia. Those territories were not only rich in resources but also represented the connecting point between Moscow and all the areas in the South. Russia had necessarily to switch from an outright territorial strategy with the operations in Afghanistan and the presence of military personnel in the region to a western strategy incorporating commercial goals as well as political and financial support. China’s presence also has implications for the strategic game. In the last years, China prevented two resolutions against the Syrian leadership and desisted at the veto for another one favouring the Libyan revolt at the time of the civil war. Until now, China has been free-riding the military presence of the US in the Middle East but it is still uncertain whether the presence of Beijing will act as an agent of steadiness. One thing is certain that we cannot expect the same Soviet influence on China as before. Moscow had no need for the oil supply and was, in fact, advancing from the price increase in the form of oil invasions. Moscow may still seek gains from the irregularities in the oil market in order to counter the growing Chinese significance especially owing to the long historical background of the co-inhabiting problems in the Eurasian Plateau. The relevance of the Middle East towards the global order and the bond of power between Moscow, Beijing, and Washington is still essential to geopolitics in the coming decades.

Analysis of Oil Politics in the Contemporary World

This power bond between the three will be the determining factor in the future of the Middle East. Growing instabilities in the Arab world along with the global irregularities in economies make the future of this region ambiguous. What’s certain is the fact that global superpowers will continue to use Israel and Palestine as pawns in their conspiracies. Their nonchalant behaviour in solving the Jerusalem issue makes this clear.

Just like in other parts of the world, energy interests are prioritised over all other issues. It will be justified to say that oil resources are the single most significant factor driving all political relations of Middle East to the world since 1945. This makes it imperative for any issue pertaining to regional politics to be linked to energy interests. Considering these two front together with the general change of assets, it is evident how the Arab-Israel conflict switched from direct military confrontation to diplomatic warfare. Empowering Hamas with necessary arms and means cannot be warranted by claiming political interests in the region. It is a clear sign of a connection of the radical Arab world with Iran and Russia. The Israeli wall, after all, is not that different from the Berlin wall.

Shale Gas and Europe’s Supply Security

The political goal of gas exports has lost importance in the developments of Euro-Russian energy ties. This is a consequence of the limits in its strategy. The theory that the country may shift its political focus in response to Moscow’s energy supplies or policy never panned out. The evolution of Eastern Europe from coal to oil and gas made these economies more dependent on Moscow’s energy supplies. The dual-edged sword of energy interdependence caused a decline in oil and gas supplies during periods of economic instabilities while Moscow chose to increase shipments to western hard currency-endowed consumers. The second biggest reason for the ruin of the political strategy was the manifestation of the commercial strategy. Not only did the socialist status of Europe depend on Russian oil and gas, Moscow became partly dependent on its exports to Europe .Besides the dichotomy between commercial and political goals in the strategic moves of Moscow.

Moscow is still majorly dependent on the energy goods and must preserve the ample flow of exports in order to maintain the financial weights of the nation, including the armed forces. The sustainability of these commercial prospects of any Russian approach in the energy industry requires political goals like a missing piece of the puzzle. In the worst-case scenario, Moscow’s contemporary political identity cannot be detached from energy, therefore, rendering all political moves a disguise for energy motives and vice versa. This gives the investment in a pipeline project a secure way of preserving a trade and transit relationship, an intrinsic political value.  As politics is a disguise for energy, any investment outside Russia that profits the energy sector consequently helps political situations as well. Strategic moves in the market of energy trading specifically those that target the political goals can be viewed as progress in a strategy of imperialist expansion. This would then help maintain power overseas and will preserve the energy trade as well. Post-ideological foreign policies are adopted if they deliver domestic profits on the face of national interest. In the case of Russia, the centralised state framework of power profits from additional and secure security rents and a reduced risk in trade. The goal of these additional rents can be accomplished through new pipelines along with the large energy projects of the twentieth century. As for risk mitigation, the goal for a skill of territorial control and coordination in order to enjoy a firm leverage in the region. The risk mitigation skill is what is actually disguised as politically driven energy targets of Russia.

Yet in contemporary Russia, it’s not energy serving the imperialist but the other way around as the interest of the country lies in the security of the energy trade. At the time of Soviet foreign policy territorial goals in the eastern part of Europe had both military and economic foundation. However, as the economy of the world shifted to world capitalism, the post-1999 Russia gave up pursuing old territorial means of economic integration with other countries. The real concern of new Russian territorialism is only related to the freedom Russia has in energy transport, in the quantity and at the price it desires. To impose its political prowess on Europe, Moscow needs to strengthen itself economically through energy and should avoid bracing selective countries if they don’t accede to informal political orders. Territorial control was the major advantage enjoyed by Russia and the western reaction was understandably severe. Fearing the high risk of Russia enjoying the existing monopoly in the gas market, a sharp tactic of political disintegration of the previous territory and satellite status was promoted by the west.

These tactics were utilised through the expansion of NATO to Eastern Europe and the western support to the so-called color revolution in Ukraine and Georgia. In retrospect, many other reasons prompted this change but none of those reasons were nearly as important as the pipeline politics were. On a more strict policy side the European Union (EU), the priority was also to limit the reach of Russia’s influence on the downstream distribution network of Europe.

Another concern faced by the EU was represented by the recurring energy crises between Russia and its transit countries, in particular, Ukraine. On three different occasions, disagreements with Russia and the direct supply problems led to discontinued service for its customers. These events in history made it clear how Ukraine represented a technical and political bottleneck for gas deliveries to Europe.

The EU was presented with two main options: one was to nurture the development of different pipeline routes, the second was to accept a reorganisation of Ukrainian pipelines in exchange for concessions to Russia. Both solutions offered advantages and disadvantages. The idea of different delivery systems would have provided the most instantaneous solution to the development of the Nord stream pipeline and a south stream in the southern corridor. A comprehensive plan of this sort would have presented Russia with the material to exert a vast control on the gas market along with its growing hold in the retail sector. Russia switching the gas flow to the countries according to political preferences would definitely be a much situation. The second solution of the Ukrainian upgrade would come at a grave cost of political exchange. The independence of Ukrainian politics did not present Russia with the necessary requirements to delve in much closer commercial ties with the country. A possible comparison could have been with the situation of Belarus which offers Russia all the essential securities for a cooperation without any service hurdles. The west was of the view that the cost of transition from Ukraine to Belarus was not justified by the advantages in terms of technical solutions of the upgrade. As a matter of fact, the upgrade of the Ukrainian pipelines had an estimated cost of 6.5 billion USD, whereas south stream’s investment is around 36.5 billion USD. The western interest in the Orange Revolution was partly vindicated by the notion that political independence of Ukraine had to prevail, leading in the end to the success of a pro-independence candidate at the elections. European policies at the time focused on three major terms: an alternative project to South stream called Nabucco, the installation of new LNG terminals on the European coasts, and the creation of “reverse flow” pipelines.

The real version of Nabucco envisaged a connection between the Turkish gas terminals of Erzurum to Austria feeding gas from Azerbaijan. The geopolitical ambiguity of the initiative was evident from the beginning, with persuading Azerbaijan preferring European initiative over the Russian one and also receiving gas from Iran. These factors in addition to the budget constraint led to its abandonment.

Numerous other projects were also initiated to curb any Russian dominance in gas trade. It seems as if the strategic game in terms of gas interconnections up to 2011 has been sparsely similar to the strategic asset of previous transatlantic diplomatic stalemates. Druzhba oil pipeline in the 1980s, Nord and South stream included an involvement of Germany and Italy. This was severely feared by the US as an attempt to make Europe overly dependent on Russian goods.

The development in the LNG technology and the installation of new European terminals made available additional quantities of gas from previously unconnected regions. Most notably, the traditional separation of the LNG world into and Atlantic and a Pacific basin is vanishing. Moreover, countries such as Bahrain and Qatar can now offer significant volumes of gas competing with the Russian routes.

However, predictions today show that Russia’s energy future is very bright. Today, it is working towards its development, consuming energy resources particularly natural gas, notably in European and Asian markets and possibly North American ones. The pivotal modifications in the energy sector led to a complete rethinking of Russian and European strategies.

The situation made clear once again how it is not just Europe being dependent on Russian gas, but also Russia being dependent on Europe. In 2010, oil proceeds represented a half of the federal budget revenue and about one-quarter of the Gross Domestic Product (GDP) of Russia, and for similar reasons, the price dip of 2009 led to a GDP crunch of nine percent. The market became ambivalent for Russia and somehow EU policies seemed to work kindly for Europe. Such a status led to the decision to emphasise on the improvement of Ukrainian pipelines as a means to secure gas supply, also in periods of high consumption. The “commercial retreat” of Russia drawn here does not mean that Russia’s energy power is about to expire. There are substantial issues characterising the structure of the system and the political framework: Russia must face a harsh round of predetermined renegotiations and is having a hard time developing energy frames. Yet, Russia has been able to endure crises more profound than the present one. The West should not consider the favourable energy situation as a permanent condition because this would plant Europe’s energy to much deeper problems when universal dynamics change. Moreover, equated to the situation of the previous Russian energy dip in 1986, this time, Russia has chances of finding more buyers. In the early 1990s, the lack of a real alternative consumption market for the West allowed for more than a decade of low energy prices. This time, the demand of the BRICs – given that they are able to keep up with solid growth patterns – will drive up global demand and prices at a much higher pace than before.

Chinese Demand and the Risk to European Supply Security

In 1997, China and Kazakhstan reached an agreement for the construction of an oil pipeline and for general cooperation in the field of energy. China was well aware of the fact that the establishment of a new energy network required an advanced approach in order for it to keep up with the prospective demand pace. The pipeline’s construction began on September 28, 2004, along the border of Kazakhstan and Xinjiang, successfully completed by July 11, 2009.

Additionally, through Alataw, there is another infrastructure transiting a gas pipeline originating from Turkmenistan. China does not have a momentous gas production deficit currently; the prospect of shale gas may also bolster domestic production but the ambition of investment seems justified by the prospective upsurge of the demand and with the goal to operate a partial substitution of coal-powered plants with gas-fired ones. The strategic prominence of this pipeline named Central Asia-China pipeline has been verified by the new agreement signed with Kazakhstan in June 2010 to connect it with Kazakh gas to be supplied to China.

No section of the pipeline between Turkmenistan and Kazakhstan will dash Russian territory. Taking heed from the experience of Azerbaijan in the early 1990s, central Asian countries are not selecting sides yet; they have not turned their backs either on Russia or on China. They are trying to use energy to fashion a political web. Most notably, Russia also exports oil to China using the Kazakh pipeline. As in the west, Moscow depends on Ukraine to export energy and in the east, it must coordinate with Kazakhstan.

The Chinese trials for the sourcing of gas from central Asia do not concern just the general structure of international politics. On the Chinese side of Atalaw pass, Beijing must face impending issues regarding the local territory. The first province in the Chinese territory to host the pipelines as they enter the national territory is Xingjian, an autonomous area with language, culture, and religion differing from the rest of the country. The dominant ethnicity in China is of the Hans and in Xingjian, the majority is of Uighur of Islamic belief. The area is rich in hydrocarbon production and the natural gas that is produced here satisfies one-third of the Chinese demand.

The supply security strategy is, therefore, reminiscent of the old Soviet strategy of  binding the two sides of the territory from east to west through a network of economic interests and military power. The general economic blue print had to face cultural differences the idea that local resources had to serve the economic development of the eastern coast. One of the reasons for tensions is the internal immigration; in 1950, the Hans represented a mere 6% of the population whereas now they represent 4% and they happen to be the majority in the wealthy urban and the industrial area. In 2001, the US found out that some Uighurs was present in terrorist camps in Afghanistan to plan attacks in Beijing. In 2006, demands rose for reforms concerning the distribution of extractive rents. Beijing then opted for a social engineering plan to curb the possible source of dissent. This included immigration of Uighurs to the Yanglze Delta region with the intent to facilitate local Xingjian development through savings wired from Yanglze. However, their strategy was unsuccessful and violence broke out in July 2009.

One of the main questions concerning China is whether the growing relationship with Russia and central Asia might impact the European supply security. Russia has been able to build some sort of preferential relationship with the new stance, particularly with Turkmenistan.

The Russian motivation to look for new export investments to China has been stimulated by the crises between 2005 and 2009. As the European gas consumption stagnated, Russia had to face enormous economic risks with a decrease in exports which in some months was 50% less in comparison to 2007. The largest part of the capitalization of Moscow stock exchange depends on the energy industry and the crash of the market has been much harsher than that of the capital markets of the west. China could have been an opportunity for Moscow before the crises too but Moscow needed time to be sure that the Chinese market was growing. Between 1990 and 2007, China’s gas consumption increased fivefold. Yet, we cannot disregard the fact that China and Russia always had problems of coexistence on the Eurasian platform, leading to major conflict in 1929, border clash in 1969, and a general political confrontation for most of the 20th century. In 2001, China and Russia signed a “friendship treaty” that opened the possibility for military collaboration. In 2005, both countries took part in a joint military drill termed Peace Mission 2005. Such initiatives were complemented by the consequences of the economic crises when Beijing intervened to help Moscow.

In February 2009, the two countries closed a twenty-year long deal in which China financed the Russian energy industry for 25 billion USD in exchange for oil. A few months later, a second large deal was closed for 100 billion USD covering also the areas of nuclear energy together with oil, gas, and pipelines. At the time of the agreement, most of the Russian exports to China were still being carried out on railway, vulnerable to any political issue which might surface. In November 2005, the then Chinese premier Wen Jiabao and his Russian counterpart Mikhail Frodkov conducted a joint press release declaring the beginning of negotiations for the building of an oil pipeline from Siberia to the Chinese markets, the East Sibera-Pacific Ocean (ESPO).

For gauging the impact of all these situations on Europe, some key points shall be considered. First, we shall admit that Russian economic diversification is not a wise solution in the long –run.

If the economy is exaggeratedly dependent on energy commodities, it would be easy to branch out energy exports market than the whole economy, to make it more stable. We can analyze Russia’s decision to develop the ESPO pipeline for economic diversification. It may also help Moscow make better investment decisions and hence reduce financial risk considerably.

The diversification of supply market reinforces Russian leverage on Europe as the opportunity selectively confines supply to European markets since Moscow might depend on an alternate eastern source of proceeds if it needs cease operations in Europe. Nevertheless, the situation is not as easy as it seems. Firstly, Russia has no geopolitical interest in expanding energy relationships with China to seize Europe. In particular, the Eastern border of Russia which also hosts important production centres, resents from demographic problems. With Chinese males moving to Russian territory as the effect of one child policy has led to sex disproportion compared to population decay in Russia. If Russian resources become overly important for China, demographic pressures might lead to a conflict. Secondly, an action of selective shut-off of European pipelines might be countered by reverse flow pipelines making such actions less effective and LNG is an integral factor.

It is possible that Russia sees the Chinese opportunity as merely a business opportunity and the political idea is only secondary. The idea doesn’t concern the imposition of political will based on the control of the supply tool but focuses more deeply on the control of energy market. If Russia manages to deploy its full-blown energy strategy, it might influence the gas process through the control of gas storage in Europe and by leading a central Asian block of gas producers capable of influencing gas prices. When this plan’s establishment was underway, the boom of shale gas was still in its initial stages. China has twice as much shale gas reserves than the US. It is enough to make traditional gas from Russia which, at present, is not significant for China. Unless Moscow offers lower prices, and that too without political claims, China does not need traditional gas from Russia for many years to come.

Chinese energy potentials are parts of the broader discussion about its approach to global politics. A recent publication by David Shambaugh states that the elements of Chinese global power are surprisingly weak and uneven. He says “China is not as important or as influential as conventional wisdom holds. The proclamation that China will rule the world in years to come is profoundly incorrect and overstated. China has a long way to go before it becomes, if ever, a true global power”. Avery Goldstein, a professor of global politics at Pennsylvania University, says, “China is much less powerful than what many people make it to be albeit more powerful than it was in the past centuries”. Such considerations of China as an unwilling global power are important, particularly when assessing its foreign energy policy. Shambaugh adds in his book that China’s energy-driven diplomacy in the Middle East, Africa, and Latin America has begun to produce further strains in Chinese diplomacy.

In general terms, the limits of China’s global energy policy may be positive or negative. The positive limits are represented by the fact that China does not seek to deliberately introduce an imperialist concept bundled to its energy diplomacy. Although, it could be claimed that the lack of ideology is an ideology itself. It seems that China’s approach lacks the traditional multidimensional approaches of Russia and America. The Asian power prefers mere commercial relations to full-blown political coordination and does not seek to introduce particular political values like democracy and free market. Nevertheless, we cannot forget that China’s traditions do not include democracy and it is understandable that the same political concept is absent from its international policy. Hence, it can be said that the policy of international commercial presence is as influential as a deliberate policy of imperialist political expansion.

The negative limit might hurt the positive limits as well. Commercial presence is, in the end, also political presence, especially in the case of state-owned Chinese companies. This is due to the fact that the flow of foreign rents may alter the domestic situation of supplying countries. Believing that commercial relations can be expanded to unlimited extents without responsibility in terms of social development is senseless. Their limits may be normal for a country that has developed an interest in expanding its international presence only in recent times. Moreover, the temporary US supremacy of the 1990s has been affected by a Russian resurgence again counterbalanced by a return of the US on the side of energy commodity production.


A pipeline from Iran to Pakistan, with the possibility of an extension to China, is planned. In case the old TAP project from Turkmenistan is recharged, Gwadar will also be the tie-in hub with China. The military tension in the South China Sea can also be explained by the demand of control on energy connections. The area hosts principal sea lanes connecting the Persian Gulf to China, through the Strait of Malacca (between Malaysia and Indonesia’s Sumatra), and in the future, it may host additional LNG traffic from Pakistan in case pipeline projects are completed. It seems to be a competition between Russia, China, and the U.S. Russia is facing a theatrical decline in all sides of society and is trying to keep the structure alive through energy exports and other state-centered resources. The U.S. countered the condensed influence and started suffering in the 2000s, through an augmented focus on domestic resources. Moreover, China has been capitalising profoundly in Iran as it wants to bolt the energy resources for its growing economy. As the interest of the Japanese, European, and Canadian firms diminishes in the face of US pressure, Chinese oil companies are firming their ties to Iran’s oil industry in recent months.

Putting everything in jeopardy would not have been a wise move for Beijing and even though the Russians had gestured some willingness in recent days to stand secure against Iran, many thought Russia too was still not willing to go after Iran’s energy sector.

Some analysts were led to assert that it was this crude connection between Tehran and Beijing that fired the Iranian stability on the matter and that China is just not considering Tehran. Already, it enjoys an extremely cordial relation with Riyadh too which is its major crude supplier. It is also looking for assistance with energy-rich Africa. As crude seems to be playing a very important role in shaping politics and positions, it dictates nations to act as per their national interests. Beijing too cannot be expected to play otherwise.

On the other side, Gwadar provides a strategic base for China to expand its stakes by the convergence of South Asia, West Asia and Central Asia. China’s stake in Gwadar is causing much distress among regional players of geopolitics. Its involvement in the Gwadar port project has also caused reservations in the minds of strategic expertd in the Pentagon. The US strategy of getting involved into Central Asia and the Gulf was mainly intended at pre-empting China from  Central Asia and the Gulf.

The proposed TAP gas pipeline would involve the construction of a pipeline about 1,700 kilometers up to Gwadar. From Gwadar, this gas would then go on to the world markets. Pakistan and India are currently involved in talks with Iran to get Iranian gas by building a gas pipeline from Iran to India via Pakistan. It seems that as the centre of global relations has moved east, the US are stressed to find means and rationale for an intrusion to influence the new energy inclinations to China. Possibly, the change in energy equilibrium is both a source and a consequence of global power; but as the experience of the Soviet Union exhibited, a period of decline does not mean a complete retreat from a region that will remain pivotal as a discriminant of global power. No great power is in a position to exert a fully hegemonic control on foreign energy-producing areas. Particularly in the Middle East, the wave of independence started in the 1970s lately inspired by the “Azeri style” multidimensional diplomatic approach, is transforming every country into a possible centre of interest and an important player in the great game of balance of power.

About the author

Ammar Alam

Ammar Alam

is a graduate of School of Economics, Quaide- Azam University Islamabad. His field of expertise is political and development economics. Currently, he is working as a research associate at Voice of Balochistan, a project of CSCR. He is also managing the Academic and Publications of VOB.

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