by Staff Writers
Beirut, Lebanon (UPI) Aug 31, 2011
China's effort to secure energy resources in the Middle East is going into overdrive as its dependence on the region's oil increases.
But the Chinese are concerned that their efforts to capitalize on waning U.S. power in the region and six months of unremitting political turmoil could be undermined by the hostility between Iran and Saudi Arabia, mortal enemies and two of China's biggest energy suppliers.
Energy is China's main priority because Beijing has to fuel its ever-expanding economy.
A net importer of crude since 1993, the Asian giant's average oil consumption in 2010 was an estimated 9.1 million barrels per day. Domestic production covers only 45 percent of that.
"The relationship between China and the Middle East and North Africa region has been one guided primarily by China's dependence on imported hydrocarbons," analyst Jennifer Malapitan-Aguinaldo wrote in the Middle East Economic Digest.
"The rapid growth in China's domestic economy caused its oil consumption to grow at an average compounded rate of 6.8 percent a year during 2000-09, while its local output struggled to rise 1.7 percent a year during the same period."
With the economy mushrooming and likely to challenge the United States in the years to come, China's oil imports are expected to increase from 4.8 million bpd in 2010 to 5.7 million bpd in 2015 and hit 6.7 million bpd in 2020.
For the Saudis and Iranians, the leading producers in the Organization of Petroleum Exporting Countries, as well as lesser Middle Eastern producers, dwindling Western demand for their output has led them to focus increasingly on China, India and Japan as their primary customers.
The Saudis now sell more oil to China than they do to the United States, although they and the other Arab monarchies in the Persian Gulf still rely on the Americans for protection.
That reliance has grown as Iran, empowered by the U.S.-induced collapse of Saddam Hussein in Iraq and the Taliban in Afghanistan, the Islamic Republic's western and eastern neighbors, pursues its ambition of becoming the paramount regional power.
Shiite Iran, long the rival of the Sunni monarchies and their allies in the Arab world, also depends on doing business with China, particularly in light of the U.N. sanctions imposed in 2010 over Tehran's contentious nuclear program.
China, a permanent member of the 15-strong Security Council, has largely ignored the sanctions and continues to do business with Iran.
"China is doing its utmost to avoid contagion from the Arab revolutions," analyst Peter Lee wrote in Asia Times Online in April.
"However, Beijing's Middle East initiatives may be scuppered by Iran and Saudi Arabia. While the West focuses on the trajicomic spectacle of the Libyan intervention, the two great powers in the region, Iran and Saudi Arabia, are moving toward confrontation."
As the network of oil and gas pipelines from the Middle East and Central Asia increasingly converge on China, Pepe Escobar of Asia Times Online reported that "trade between China and Iran grew by 35 percent in 2009 to $27 billion."
"So while the West has been slamming Iran with sanctions, embargoes and blockades, Iran has been slowly evolving as a crucial trade corridor for China -- as well as Russia and energy-poor India.
"Unlike the West, they are all investing like crazy there because it's easy to get concessions from the government; it's easy and relatively cheap to build infrastructure; and being on the inside when it comes to Iranian energy reserves is a necessity for any country that wants to be a crucial player in Pipelinestan, that contested chessboard of crucial energy pipelines over which much of the New Great Game in Eurasia takes place."
Indeed, in 2010, the Saudis, obsessed with the prospect of Iran becoming a nuclear power and arming itself to the teeth with U.S. weapons worth $67 billion, offered to supply Beijing with the same amount of oil it imports from Iran, and at a cheaper rate, if it would turn its back on Iran.
China declined. But because of the danger of Iran blocking the chokepoint Strait of Hormuz, the only way in and out of the gulf and a vital energy artery supplying China, Beijing is pushing ahead with building more secure pipeline across Central Asia to bypass the vulnerable maritime routes.
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ConocoPhillips says China spill mostly cleaned up
Beijing Aug 31, 2011
US oil giant ConocoPhillips, facing lawsuits and mounting public anger over a huge oil spill off China's northeast coast, said Wednesday it has sealed all leaks and cleaned up most of the slick. China's State Oceanic Administration (SOA) had ordered the firm to seal off all oil leaks near a platform in Bohai Bay which is jointly operated by state-owned CNOOC and halt any more spillages by th ... read more
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