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The United States vs China: the war for oil

In April 2006, the Chinese prime minister Hu Jintao visited Washington and lunched with President Bush. Many observers noted the apparent indignities inflicted on the Chinese leader in the United States – from embarrassments of protocol involving the playing of the wrong national anthem to a Falun Gong protestor who interrupted the two leaders' joint press conference. At a deeper level, several political analysts noted that Hu's trip to the US was only one stage of what would turn out to be something of a world tour, with subsequent stopovers in Saudi Arabia, Morocco, Nigeria and Kenya. This focus on the Arab world and sub-Saharan Africa reveals the core theme of Hu Jintao's itinerary: oil.

In Saudi Arabia, Hu discussed a series of current and future developments, all connected to the Saudis' position as the largest single supplier of oil to China – more than 22 million tonnes in 2005. A refinery for Saudi oil is already being built in Fujian and a joint refinery venture is planned for Qingdao. Perhaps more significant is the plan to build a strategic oil-reserve facility in a coastal location in southeast China, the aim being to supply and store Saudi oil in which can be used in times of conflict and disruption to supplies (see "Hu in Saudi Arabia and Africa to talk oil", AsiaNews.it, 24 April 2006).

China's interest in Saudi oil is paralleled by its major deals with Iran; the largest of these, agreed in October 2004, involves a thirty-year contract worth $70 billion over the Yadavaran field, which will deliver oil and gas to China together with rights to exploration and development.

In his April visit, Hu Jintao discussed expanding relationships further with Nigeria and Kenya. Nigeria is already a significant supplier both to China and the United States; it provides the United States with 15% of the latter's oil imports, a figure likely to rise to 25% by 2016. China wants a closer strategic relationship with Nigeria and is currently seeking exploration agreements not just for some of the well-known offshore regions but also for the riskier but potentially important Lake Chad basin. The fact that Kenya was on Hu's itinerary is particularly interesting, and reflects China's search for agreements there to explore some decidedly unproven areas off the coast of east Africa.

In both countries China is prepared to take risks with its investments, not least because of the sheer speed at which its requirements for oil imports are rising. This is well-known among analysts specialising in energy security, some of whom argue cogently that one of the real drivers of international relations in the Persian Gulf is the desire by the United States to remain the dominant military force in the region, while China seeks to develop much closer political and economic ties.

The new "great game"

The connection between these geopolitical issues and the United States's military thinking is highlighted by the extraordinary coincidence of timing between the Chinese premier's visit to the White House and a major US military wargame being conducted in Hawaii. The exercise, involving senior military planners from the Pentagon, is reported in the informed security journal Defense News (see Vago Muradian, "U.S. Exercise Reflects Growing Tensions", 29 May 2006 [subscription only]).

The wargame started with a crisis involving Iran which quickly escalated when the Tehran regime attacked shipping in the Persian Gulf; this in turn provoked a massive US naval response. As this conflict was developing, China attacked Taiwan, leading the US to split its forces in order to be able to respond to this additional challenge.

Just to make things really complicated, Venezuela then got in on the act by sending submarines into the Gulf of Mexico, linking up with a Chinese submarine and then rocketing American and Mexican oil facilities. The United States could not cope with this and called on the British to help; London promptly sent some nuclear-attack submarines to sink the Venezuelan and Chinese forces. As the "game" played out, India joined in on the US side only when the war was going well for Washington, and Russia stayed firmly out of the conflict.

The details of the US's regular wargames are frequently leaked to the specialist defence press, from where they are noted by defence experts in Congress. They can be seriously far-fetched – the prospect of the Chinese sending a submarine half way round the world and Venezuela declaring war on the United States still belongs (Hugo Chávez's rhetoric notwithstanding) more to the pages of a Tom Clancy novel than to reality; but the projections they act out also serve the purpose of building on pre-existing fears in ways that can have a practical, military and commercial, result. For example, the request for British intervention as part of the wargame raises the possibility of the US navy claiming that it urgently needs more anti-submarine forces in order to preserve its strategic independence.

More generally, and as Vago Muradian points out, the common thread running throughout the entire wargame was the strategic significance of oil. The article identifies three key, interlinked elements in its military calculations:

  • Venezuela's perceived anti-Americanism
  • Russia's greater political independence stemming from its own oil wealth and its expanding arms-export industry
  • Iran's putative pursuit of nuclear weapons in programmes financed through its status as the world's second-largest oil producer.

These three factors are combined in the United States's strategic thinking with (according to Defense News) "(nervousness) over the rapid rise of China's military power, and the country's zealous worldwide drive to lock down exclusive sources of oil supply." Such "nervousness" is aided by China's deals with Iran and Nigeria.

The US sees the Saudi connection as particularly worrying, given Saudi Arabia's long-standing links with the United States, especially the close relationship between the Saudi royal family and George Bush senior. China's plan to build that strategic oil reserve and fill it with Saudi oil for use in an emergency is seen as proof that China is determined to preserve its energy supplies as it seeks to grow into an economic superpower.

The United States concern with oil security is nothing new. Franklin D Roosevelt was concerned about the security of Gulf oil during the second world war. A generation later, the US responded to the 1973-74 oil-price shocks and the Iranian revolution in 1979 by establishing the Rapid Deployment Force, subsequently expanded into the much larger US Central Command (Centcom). Centcom, based in Florida, ran the 1991 Iraq war and now oversees both the Iraq and Afghanistan deployments.

Centcom's original commission was to respond to possible Soviet aggression in the region in the cold-war era; today, in very different conditions, much of its geopolitical concern has been neatly transferred to China (see Robert D Kaplan, "How We Would Fight China", Atlantic Monthly, June 2005). What is intriguing is the tension between the presentation of US deployments in the middle east and southwest Asia as being tied to the threat of al-Qaida as a central part of the global war on terror, and the organisation of a major wargame devoted entirely to oil security.

As the United States military gears up for Donald Rumsfeld's "long war", the issue of China and its linkage with Gulf oil security is an unspoken element that comes to the surface only when such exercises as the Hawaii wargame are revealed and reported. It is a salutary reminder: while all the public emphasis is on the war on terror, China looms in US military planning as a powerful presence behind the scenes.

The "great game" now being played out in Iraq, Afghanistan and the wider region has much more to do with the twin issues of oil and China than is readily admitted. It is just one more reason why any talk of a complete US military withdrawal from Iraq is simply unthinkable.


This article by Paul Rogers was originally published on openDemocracy.net under a Creative Commons Licence. If you enjoyed this article, visit openDemocracy.net for more.

Editorial Notes: More writings by Professor Paul Rogers are online at openDemocracy. According to the website:
Paul Rogers is Professor of Peace Studies at Bradford University and is openDemocracy’s International Security Editor. A consultant to the Oxford Research Group, the second edition of his book Losing Control has just been published by Pluto Press.
-BA

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