By Philip Gater-Smith.
Security and oil have typically been the two dominant themes of international coverage of the Middle East. The news in recent months has hardly been an exception. Current Middle Eastern insecurity has many contributing elements, from Iraq and Syria to Yemen. The story with oil, meanwhile, is the low price, hovering at around $60 per barrel, a result of increased southern Iraqi output, the resilience of US shale, and OPEC’s ongoing unwillingness to cut production.
Gulf-China Oil Trade and American Hegemony
One of the main beneficiaries of cheaper oil is, unsurprisingly, the Persian Gulf’s biggest customer: The People’s Republic of China. Having become a net oil importer in 1993, China’s growth over the last two decades has resulted in an oil demand of 10 million barrels per day. Around half of China’s total oil imports come from the Middle East, with one fifth from Saudi Arabia alone. Chinese oil consumption, according to BP, will rise by 80 percent by 2030. Holding half of the world’s proven crude oil reserves, the Gulf states will provide the lion’s share. Big investments into each other’s energy infrastructure, a boost in general business ties, and an intensifying political cooperation between China and the Gulf reflect a ‘marriage of convenience’ at the very least.
To talk about a full-blown China-Saudi / Gulf Cooperation Council (GCC) alliance would be an obvious over-interpretation at this stage. It is still the United States that holds the unofficial title of ‘regional hegemon’ and represents the number one ally of the Arab Gulf countries.
The US dominance in policing the Strait of Hormuz began with the Carter Doctrine in 1979. Three regional incidents of geopolitical magnitude had shattered the former US ‘twin pillar’ strategy, which relied on Iran and Saudi Arabia guardians. Using John Mearsheimer’s offensive realist terminology, Washington had been undertaking “offshore balancing”.
The Iranian Revolution, the terrorist seizure of Mecca’s Grand Mosque, and the USSR’s invasion of Afghanistan prompted Jimmy Carter to announce a new regional doctrine calling for greater US military involvement in the region. This strategy was then actively launched by Ronald Reagan and firmly cemented by George H W Bush’s decision to oust Saddam Hussein’s occupying forces from Kuwait in the 1991 Gulf War. The resultant stationing of American troops in bases inside all GCC countries put the region under a firm US security umbrella. This trend reached its peak post-9/11 in the 2003 invasion of Iraq, and will presumably remain the status quo even after the Iranian nuclear crisis is managed.
Alongside counter-terrorism and counter-proliferation of WMDs, energy security has long represented America’s (and indeed much of the world’s) core Gulf interest. Yet, it is now to China (and Asia as a whole) where most of the oil will flow. This development marks an important structural change. How will it influence both American and Chinese strategy?
Persian Gulf outside Power History
Persian Gulf history has partly been shaped by outside power influence. In modernity, the Portuguese, Dutch, British and Americans have tapped into the region’s economic promises, and have followed strategic incentives to safeguard maritime trade routes in their heyday – seeking to deter potential enemies. Yet most of these external influences were often indirect without formal colonisation. Rather than getting entangled in local conflicts between the tribes, these Western empires mostly preferred to treat Gulf ports merely as a trading and logistics hubs, commercial and military supply chains for their more important imperial possessions along the Indian Ocean littoral.
Though differences in strategy (and the differences in extent of violence towards locals) between the various outside powers must clearly be acknowledged, the small Gulf sheikdoms and tribes often actively appreciated the economic and strategic opportunities these foreigners brought. Not only did Gulf traders benefit from further integration into a wider Indian Ocean economy, from time to time, the superior European navies proved useful in helping to guarantee Gulf independence from regional powers such as the Wahhabis, Ottomans or Persians. These short-term alliances resemble the archetypical neo-realist balance-of-power behaviour from both points of view.
In the 1600s, the Dutch and English East India Companies seeking commerce across Asia were politically empowered by Amsterdam and London to act as privatised political units. In alliances with Safavid Persia and the Yariba Imamate in Oman, they drove out their Portuguese rivals who had been involved in this area since the 1500s. In exchange for Dutch and English naval assistance, the Persian shah offered trade concessions.
However, against the backdrop of Safavid economic and imperial collapse decades later, the 18th century saw an era of political fragmentation, local wars and a gradual proliferation of piracy off the Arabian Peninsula. Avoiding the serious security risks and seeing no future profitability, the Dutch gave up on Gulf business. Even the British – who, prior to the industrial revolution, did not have the capabilities to project power into vast territories – largely circumvented the Gulf, and only returned to shield it off from their French rivals in the Seven Years War and the Napoleonic Wars. Next to the influx of Qasimi pirate attacks on British commercial vessels at the turn of the century however, these geo-political zero-sum games proved just as important for the future regional involvement.
At a time of the Great Game and accelerated imperial expansion, London’s realist strategy now perceived the Persian Gulf as a power vacuum, needing to be controlled, with the purpose of protecting India’s periphery. The 19th century’s series of bilateral treaties between Bombay’s envoys and the major southern Gulf sheikdoms then formed the new order of the Trucial States which – relative to the unstable 18th century – largely pacified the Gulf. The Royal Navy patrolled the waters and British-Indian sepoys were only sent to intervene militarily on the Arabian Peninsula whenever bigger tribal skirmishes threatened to destabilise the region, or whenever the Wahhabis, Egyptians or Ottomans made a bid for domination. French, Russian, and German meddling was always instantly deterred.
This regional order served British interests, but had the simultaneous effect of allowing the pearling industry to kick-start the Trucial Coast economy. Only the great depression ended this era of growth and even whilst both world wars halted regional progress, the political system and alliances remained intact.
It was especially after 1945 that a far more direct British role in the region became apparent, echoing a trend already seen a few decades previously in Iran and Iraq. Simultaneous to Indian independence after World War Two, the new primary British interest in the Gulf lay in oil exploration. Under the protection of British troops, now stationed there to keep out the Soviets, British oil companies developed the regional industry. For two decades, London also became directly involved in building modern administration and infrastructure.
In 1968, for both political and financial reasons, Harold Wilson announced Britain’s withdrawal from the East of Suez, a move that dramatically altered the regional system. The UK’s exodus in 1971 left the United States in the position of having to rely primarily on its twin pillar strategy. As previously noted, offshore balancing lasted for merely a decade. The 1970s saw heightened regional tensions on several fronts; the Arab oil embargo spawned the global energy crisis during the time the US came to rely heavily on Gulf crude. Today, America finds itself in the former British role of stabilising the region via an extensive military presence.
Is it still worth it? At a time when an increasingly reluctant US seems eager to avoid the repetition of past blunders, spending billions of dollars annually to uphold Gulf security for China to free-ride on might seem questionable.
My brief overview of Gulf history clearly identifies a pattern of neo-realist great power behaviour. If we are to draw from these observations, it seems that, for the moment, a US retreat from the region is highly unlikely, because such a policy would risk jeopardising core American interests. Comparable to the British Empire, a capable US would seek to control strategically vital bottlenecks and to deter outside power rivals from gaining advanced military access.
Despite its military modernisation, China is still far from matching American capabilities. Given its dependence on Gulf oil though, neo-realism would dictate that China should hedge against future risks. Echoing the early modern establishment of European-held ports along the Indian Ocean littoral, China has stepped into these empires’ footsteps, by acquiring proxy ports in the South China Sea, Burma, Bangladesh, Sri Lanka, Pakistan, and Djibouti.
Still, given the current international distribution of capabilities, we will most likely not see China as an outside military power in the Persian Gulf in the short to mid-term future.
Yet, particularly in the longer run, this forecast may only be accurate under the proviso that there are no significant changes in the international system. As the rather abrupt British withdrawal from East of Suez in 1971 demonstrates, history hardly operates in a linear way. Some type of domestic political shift in the Gulf or the US, or a dramatic US-fiscal crisis, could very well spark a quite sudden American withdrawal from the Gulf. In such a scenario, it seems more than credible that China, also racing to beat Asian rivals like India or Japan, would rapidly extend its string of pearls into the Persian Gulf.