Oil may fuel Sino-US conflict

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http://english.aljazeera.net/NR/exeres/59F15F30-6ECB-45E1-951E-2472A16B8017.htm

By Adla Massoud in New York

 

 

 

Thursday 29 June 2006, 9:45 Makka Time, 6:45 GMT

 

 

 

China's quest for oil in the Middle East is threatening US energy and security

interests in the region and increasing the risk of a conflict between both

nations, analysts say.

 

 

Flynt Leverett, senior fellow at the New York-based Saban Centre for Middle East

Policy, told Aljazeera.net: " There's a force of increasing tensions in the

Sino-American relationship and if you carry that trend out long enough, you do

begin to run a more serious threat. "

 

 

 

As the dominant geopolitical power in the Middle East and the Arabian Gulf,

America's main concern is not only the acquisition of cheap fossil fuel but also

the growing involvement of China's energy sector in a number of ''problem "

states such as Iran, Sudan and lately, Syria.

 

 

 

George Bush, the US president, recently told the American public that " addiction

to oil is a matter of national security concerns " .

 

 

 

" Some of the nations we rely on for oil have unstable governments, or agendas

that are hostile to the United States. These countries know we need their oil,

and that reduces our influence, our ability to keep the peace in some areas. "

 

 

 

Kenneth Pollack, a former CIA and national security council Middle East analyst,

told Aljazeera.net that just as the US oil needs had helped to keep

dictatorships in power in the past, China was buying into oil in places where

those purchases supported governments of countries seen as hostile to the West.

 

 

 

" It can be very detrimental to the US, particularly if the Chinese were to adopt

the role that the Soviets did during the Cold War, supporting whichever state

opposed the United States, " he added.

 

 

 

Investing in Sudan

 

 

 

China has invested more than $8 billion in Sudan, which now supplies over 7% of

the Asian giant's oil. It has also invested another $70 billion into Iran's oil

and gas industry, which meets 11% of its energy needs.

 

 

 

" There are a lot of Arab states in the region who are looking to China ...

as a potential political counterweight to the US "

 

Kenneth Pollack

 

In return, Beijing offers powerful incentives for these countries' energy

resources: Economic and military aid, access to Chinese markets, and support at

the United Nations where Beijing wields veto power at the Security Council.

 

 

 

China has also shown willingness to oppose US policies as it did in 2004 when it

threatened to veto a US proposed resolution to impose sanctions on Sudan, or

when it signalled resistance to any UN measure that would include the threat of

military action against Iran.

 

 

 

Analysts say China's need for oil has been a major factor in Beijing's refusal

to support stronger action against those countries and that it has an interest

in seeking peace in the Gulf to ensure the security of its growing energy

investments.

 

 

 

" The US' argument to China, which the Chinese recognise, is that Iran with

nuclear weapons would be very destabilising to the region and that could

jeopardise China's number one priority in the region which is the flow of cheap

oil, " Pollack said.

 

 

 

As the world's third largest oil consumer, China relies heavily on the Middle

East, which provides about 45% of its total oil imports, with Saudi Arabia

accounting for about 17%.

 

 

 

Growing industrialisation

 

 

 

While China still consumes far less oil than the United States, increased

production in industries such as steel, aluminium, and cement have driven up its

energy consumption and oil prices.

 

 

 

According to the International Energy Agency (IEA), Chinese oil imports will

rise more than six times between 2002 and 2030, from 1.7 to nearly 11 million

barrels per day.

 

 

 

 

China depends on shipping for

almost all of its energy imports

 

In other words, China's oil imports will rise by an amount nearly equal to Saudi

Arabia's total current oil production capacity.

 

 

 

Meanwhile, Middle Eastern energy producers are looking to China as an

alternative to US hegemony in the region.

 

 

 

" I think there are a lot of Arab states in the region who are looking to China

not just as a potential economic partner, but also as a potential political

counterweight to the US. The more they bring the Chinese into the region and the

less they will have to do what the US tells them to, " Pollack said.

 

 

 

Even the staunchly anti-communist Saudis - whose oilfields were developed by US

companies - is cultivating China as a consumer of its oil and gas to hedge

against further deterioration in US-Saudi diplomatic relations.

 

 

 

Said Pollack: " In the aftermath of 9/11, if you look at the anti-Saudi backlash

in the US, the Saudis had to take seriously the possibilities that their

strategic partnership with the United States might deteriorate. Fundamentally

they needed an alternative. "

 

 

 

Sino-Saudi ties boosted

 

 

 

In late April, Hu Jintao, the Chinese president, flew to Saudi Arabia for talks

with Saudi Aramco, the world's largest oil producer.

 

 

 

 

China's oil imports are expected

to increase six fold by 2030

 

The visit marked the latest episode in a continuing Chinese effort to ensure

access to Saudi Arabia's 9.5 million barrels per day of oil production.

 

 

 

That visit, coming just after meetings between Hu and George Bush, the US

president, was closely monitored in Washington.

 

 

 

Ted Galen Carpenter, vice-president for defence and foreign policy studies at

the Cato Institute, told Aljazeera.net that " the Saudis regard China now as a

very important customer for oil and will be increasingly important in the coming

decades " .

 

 

 

" I don't think that's a terribly smart thing for US interests. The US has made

an economic and political competitor again on the global scene which is

something we've really not had since the end of the Cold War in 1990, "

Carpenter, who is also the author of the book America's Coming War with China,

said.

 

 

 

China-US rivalry

 

 

 

The IEA predicts that by 2015, 70% of China's oil imports will come from the

Middle East. And more than half of its oil will have to transit the Malacca

Straits, one of the busiest shipping lanes in the world, located between

Malaysia, Singapore and Indonesia.

 

 

 

The US navy controls the sea lines of communication (SLOC) or primary maritime

routes, in all the major energy transit junctions, including the Straits of

Hormuz, the Malacca Straits and the Southeast Asian sea lanes.

 

 

 

US analysts say there is an expectation among Chinese strategists that the US

will use its naval leverage to disrupt its energy imports should any conflict

over the status of Taiwan arise.

 

 

 

The Chinese are reinforcing their navy, concerned with the insecurity of the

maritime routes upon which almost all of China's energy imports travel.

 

 

 

But " it will not be a threat to the US unless China has a very large modern and

capable navy which it has not remotely done to this point " , Carpenter said.

 

 

 

Hoping to avert a new war of the Pacific, Beijing is developing alternative oil

delivery routes that are meant to avoid US naval control.

 

 

 

China has bankrolled more than 80% of a $248 million project to develop a

deep-sea port in Gwadar, Pakistan. This would lessen its reliance on sea routes

by allowing oil to be transported overland through Pakistan to western China.

 

 

 

China also recently opened a 1000-km link carrying 190,000 barrels per day of

Kazakh oil, providing its first direct access to potentially rich central Asian