Global confrontation between the United States and China: the oil factor
Material posted: Publication date: 05-08-2013

In the current global geopolitics as the primary means of Balance/Dominance among many other things, are credit-finansovyi industrial and economic leverage. To apply them it is necessary constantly alternating not only against direct competitors but also against any significant countries in the world. And do it so skillfully that any action of the opponent the maximum benefits of the Empire, and inaction ultimately are led to the deterioration of positions and defeat the opponent.

Since the early 90-ies of the role of the Leader completely and undeniably moved to the United States. But, watching vigilantly for the main competitor of Europe and deterring the attempts of revival of Russia on the wreckage of the USSR, Washington initially did not interfere with the creation of the "world factory" in China. No matter willingly or unwillingly, but the U.S. missed the moment when China began as "factory-branch of TNC", managed not only to gain a huge industrial and economic power, but also skillfully turn it into credit and financial strength of the Yuan.

China in the global game has reached that yet other competitors States — neither Europe, nor Russia, nor the growing economy of the BRICS countries. Although China is clearly not offering alternatives compromised after 2008 the current global credit and financial system, but even the idea of the Yuan as a Dollar alternative, this is a clear threat to the world dominance of the United States.

The United States attempts by analogy with the Euro to draw yuan in financial and stock exchange and currency exchange games to support the Dollar, Beijing has ignored. As a result on the financial front against the USA with China has ground to stalemate. None of the contestants decided not to put an open blow to the financial system of the enemy, who in the absence of alternatives would be suicidal for the global economy. "Fighting" moved into a positional war.

The situation is completely different in the industrial and economic front. The confrontation unfolded around the world and even seriously undermined stability in many parts of the world.

While the main goal of the United States — commodity dependence of China's industry, namely the blood of the modern oil industry. Rather, the sources and routes of supply to China. China came in first place in the world in terms of net oil imports, reports the Financial Times. The publication says that China made a "historic breakthrough" with respect to this indicator, having overtaken the USA. According to the customs administration of the country in December 2012, China increased net imports to 6.12 million barrels per day. Independent analysts have estimated the level of net imports in 5,994 million barrels per day.

In 2012, Chinese imports of crude oil amounted to approximately 271 million tons, the increase compared with 2011, and reached 6.8%. Following rapid economic development in China continued rapid growth in energy demand, imports of crude oil constantly set new historical records. Senior Deputy Director of Corporation "Sinopec", the largest Chinese oil refiner, Cai Immediately recognized that the share acquired by this Corporation overseas oil already exceeds 80%, the limited resources became the main problem of development of enterprises-consumers of energy resources. The assistant Director of the Chinese Corporation "Sinochem" Zhong Ren predicts that by 2020 the demand for oil in China may exceed 700 million tons, of which two-thirds must be obtained through imports. The Chinese factor makes itself felt and in great and in small. Recently in the desert on the borders of Iraq, China has built its own airport on which planes land with Chinese workers on Board to service southern Iraq oil fields. Planned soon direct routes from Beijing and Shanghai to Baghdad. Luxury hotels port city of Basra, Chinese business elite surprised their hosts not just by speaking Arabic, and in Arabic with an Iraqi accent. And more importantly, the Chinese did not complain about anything, they say, "all is well, beautiful Marquise!" It's not whimsical Western firms! The strict terms of the contracts? — o"Kay. Little profit? Bit. China's most important energy to feed its huge and growing all the economy. Chinese oil giants can wait a surplus, especially since they belong to the state and don't answer to demanding shareholders and pay them dividends.

Before the American invasion Iraqi oil industry was in limbo, cut off from the rest of the world by international sanctions against the Baghdad dictator. Deposing Saddam, Washington eliminated these obstacles, and China is actively rushed to the huge oil resources of Iraq. The state company China steel to invest annually more than two billion dollars in Iraqi oil company and the transport to Iraq of hundreds of Chinese workers of petroleum. In addition, they agree to play by your local rules and do not pursue high profit. "We lost, said Michael Makovsky, a former Pentagon under the administration of a Boom and one of the developers of its oil policy. — The Chinese had no belong in the war, but from an economic standpoint they are benefiting the most, and our Fifth fleet and our air force actually guarantee China uninterrupted supplies of Iraqi oil"...

Some observers believe that China's success using the results of the victory of the USA in Iraq, are not necessarily only negative for Washington. Increasing the production of Iraq, which greatly facilitates the Chinese labour force, covering the world economy from rising prices that cause Western sanctions imposed on the oil of Iran. Add to that the oil boom of the USA, which exceeded all expectations and calculations, and the dependence of the West, including the United States, from middle Eastern oil more and more is waning. At the same time, America completely with hands that China's interest in Iraqi oil contributes to the stabilization of Baghdad, which is threatened by all sorts of religious conflicts. "Our interest is that the oil in Iraq is that Iraq makes money. This is a big plus, says David Goldwyn, who was the coordinator from the U.S. state Department in international Affairs concerning energy in the first Obama administration. — From the point of view of geopolitics, rapprochement of relations between China and Iraq are quite satisfied with Washington."

You can agree or disagree with the article cited the statements of American politicians. But pay attention to the following facts:

First. China uses the oil of the Iraqi government in Damascus and the southern oilfields of Basra, despite having poor access to the Northern-Iraq oil the KRG and the disputed territories of Kirkuk and Mosul. 2) the Issue of separating the Kurdish region from Iraq is so serious that Prime Minister Maliki, despite the accusations of MP Hassan Allawi, held talks with Barzani not in Baghdad and in Erbil. 3) Despite all the efforts of Baghdad, there is a growing escalation of the situation in Iraq relating to the ethnic conflicts between the ruling Shiites, Kurds and Sunnis. 4) it is Not excluded that the unrest in Turkey may be associated with problems of the formation of a Kurdish state in Iraq.

And the conclusion is simple. Although the "oil progress" China in Iraq are significant, but their results at any time may be buried in the event of a probable destabilization of the situation in the middle Eastern country. According to Chinese experts China needs to import crude oil will continue to rise.

Second. Of the most reliable exporters of crude oil in China can be identified Russia, Kazakhstan, Angola, Venezuela, Brazil, Congo. Potentially reliable exporter can be considered as Iran and Oman. Other country suppliers of oil to China are potentially "problematic" due to the tense situation in the region or their political orientation loyal to main rival China — USA.

Thus, the share of potentially problematic suppliers in the Chinese import of crude oil is about 40%. However, any merchant knows that it is not so dangerous markets even in turbulent cities, as the caravan route. Know this, and thieves who prey on the roads...

The control of the United States on the sea lanes allows them to create problems of its main rival — China without the risk involved in a direct confrontation. The situation in the Persian Gulf — a clear proof of it.

The first part of the article approximately 40% of crude oil exports to China carry out potentially unreliable partners. If the US geopolitical opportunities to increase this percentage problem, for example, to 60? Yes. Whether Washington uses this trump card in the struggle against China? With very high probability - No.

First, let's not discount the spot purchases of oil on the stock exchanges. They are difficult to control, but for the importer, they can become life-saving straw, giving a breath of air and to resist the "first shaft" and to prepare for future "emergencies". Especially if the importer like China has a lot of money that he's not afraid to spend.

Secondly, burning entire regions and, exerting political pressure on oil exporters, thereby forcing them to incur substantial losses, it is possible to overturn the entire global political and financial system. But in the General chaos and the complete abandonment of established "rules of the Game" former authority, experience and even power often don't save a "Master" pressure from reckless and self-destructive courage of hungry Newcomers eager to grab their share of the power and wealth. "Beginner", which has nothing particularly to lose, will not fail to take advantage of the quite a tempting chance 50 on 50 bet "all in" on one con to beat a recognized "Professional". But if betting against "the Master" will not only "Beginners"...

Thirdly, the most important thing. Clumsy blow on the sources of Chinese imports of oil is high hydrocarbon prices, and, therefore, an extremely valuable gift from the second most dangerous geopolitical rivals USA and Russia.

And as a result... Paraphrase the famous phrase from a popular Soviet sports commentator N. Ozerov: "Geopolitics of they don't want..."

The way out of this situation is quite simple, known to many, and have long realized the US on a routine and ongoing basis.

  1. The "problem" has to "occur of themselves" only in a few countries, the oil importers, with no apparent direct intervention of Washington. As in 2011 it happened in Sudan and how it is happening today in Iraq. Iranian oil embargo — has different perspectives and goals, which we'll get to later...
  2. The main weapon against anyone (not just China) importer of oil (or any other carrier of strategic goods and resources) - reliable control over the most important points of the main ways of cargo transportation with the possibility of effective economic and military-political influence on their work.

Pipelines transport a significant component, but let us put aside the deeds of the land and turn our eyes to sea routes of oil transportation. Moreover, a large portion of the world's oil reserves is coastal or offshore zone of seas and oceans. Let's start on the importance of the Straits, with the leader of oil transportation.

1. The Strait of Hormuz an Iranian embargo for the USA aims not so much to actually harm Tehran or destroy it is still not proven by the experts of the IAEA a hypothetical "military nuclear programme".

Its main purpose, in my opinion, already achieved:

  1. Mainstream media has entrenched in the mind of the world community as axiomatic that Iran blockade the Strait of Hormuz will definitely be held, it is only a matter of time.
  2. The embargo is negatively affecting the socio-economic situation in Iran, not only does not prevent, but even encourages considerable strengthening of the military potential of Tehran. Potential tactical and therefore designed automatically hostile neighbors of Iran.
  3. Pro-us and anti-Iran position of Saudi Arabia and Qatar in middle Eastern politics and territorial disputes with the UAE "warmed up" Iran so much that he's potentially ready to engage in an armed confrontation with the Gulf Monarchies, will result in a serious shock to the world export of crude oil, and, once again — attempt to blockade the Strait of Hormuz.

And the USA are likely in the required time press the "trigger" the implementation of these plans. Either alone or using regional contradictions Tehran with unfriendly neighbors or Israel.

Alas, with the right approach long "to beg" Iran to resort to power methods of response and protection, they will most likely not have.

Consider the most acute scenario — a territorial conflict between Iran and the UAE or military-political conflict between Iran and the KSA.

In the case of the beginning of the confrontation of Iran with KSA or UAE, the US has a direct reason to attend to the safety of navigation in the Strait of Hormuz — the road from the Indian ocean to the main base of the 5th fleet in Bahrain and one of the main supply routes, the U.S. group in Kuwait. But, quite likely that the States will be some (not very long) time not particularly in a hurry to unblock the Strait, explaining the delay by the necessity of thorough preparation for dangerous operations against Iranian mine-torpedo means, air defense and coastal defense.

And while the Ormuz will be some time closed by Iran, China will incur huge losses in the attempt (most likely successful) to compensate for the loss of imports of middle East oil.

Imagine that the Strait of Hormuz even for a short while but still blocked by Iran. And what about such important importers of middle Eastern oil as the EU, Japan, Korea, South Africa, Turkey and India?

For starters, the U.S. should ensure the safety and the maximum loading of existing pipelines that bypass the Strait of Hormuz. Their oil primarily primarily will be addressed to the partners of Washington. From Japan, UAE, KSA and the EU. Moreover, the capacity of the Suez canal is higher than the Bab-El-Mandeb Strait. Hence the logical flow of oil to the North, away from the path to export North African oil to Asia.

And now for the countries importing oil from the middle East. For Europe before hitting appropriate:

  • any means to maximize the import of Libyan oil;
  • return of Syrian oil to the EU market;
  • to prepare the possibility of supply on the Mediterranean coast maximum volumes of Northern Iraqi oil and oil reserves the KRG;
  • perhaps share with the EU a part of the American quota on Nigerian oil;
  • initiate to increase the supply to Europe of Russian oil;
  • it is possible to recover Transgranichnogo of the pipeline.

And by and large "all sorts" of Greece, Spain, Portugal, Italy and countries of South-Eastern Europe can have some time to wait till the lifting of the blockade of the Strait of Hormuz. All the inconveniences will write off the crisis, while profit increased dislike for the "evil Iranians" and not to their own governments.

For Japan and Korea. Possibly for some time to increase the supply of Indonesian and Australian oil

For the Republic of South Africa. It is difficult to predict what to replace 25% of imports of Iranian oil. Let's not speculate and assume that "the Abroad will help them", or maybe African neighbors, or relatively near Russia's BRICS partner Brazil...

For Turkey. The only countries that have the advantage of land of its proximity to Iran. The case when the phrase "case pipe" has a positive value.

For India. India competition for available assets crude oil with China will only give the situation useful to US intrigues

In addition Remains in reserve "grey horse" outside the Strait of Hormuz — Oman, which is likely to take up neutrality in the case of confrontation between the KSA and Iran. At least unlikely to support CSA or other radical Sunnis.

Because importing oil is important to "make friends" with Oman. But the need for such "friendship" you see, as mentioned in the first part of the article, and the USA. But which of the buyers of oil in cases of force majeure, the time will be more like Muscat, it is hard to say...

Conclusion. The close the Strait of Hormuz, if it is done in a short period of time is possible. The consequences for the world economy will be extremely difficult though, but, quite probably, suicidal. Yes, this step requires careful preparation for the most large possible scenarios that it is difficult for any player, including the most sophisticated planners in the USA. But to prepare, to organize and to carry it even extremely difficult, but possible.

Nevertheless, any action designed to initiate overlap by Iran of the Strait of Hormuz, it is rather undesirable for the US of force majeure or an act of emergency "plan B" than a necessity. And before that, in the current geopolitical scenario in the BW, I think, will not happen.

Much easier and safer for the world economy prepared to play again after the withdrawal of U.S. troops from the country by the Iraqi map. Especially given the significant increase in the supply of oil in China. Moreover, Iran is unlikely to remain indifferent to the opposition Iraqi Shiites with local Sunnis or Kurds. Fairly easy way sewage growing military power of Iran in the least dangerous to the US middle East policy direction.

Source: http://forum-orion.com/blog/globalnoe_protivostojanie_ssha_i_kitaja_neftjanoj_faktor/2013-07-01-13

Tags: assessment , USA , resources , geopolitics , China