Territorial disputes: The Persian Gulf (Part 20) [Post 180]

The Persian Gulf and China

China’s core national interests in the Gulf region currently include geopolitical interests, economic and trade interests, energy interests, and non-traditional security interests.

Its geopolitical interests consist of four dimensions: to refuse any single power’s unilateral control of the whole region, to prevent the emergence of any anti-Chinese regime in the region, to oppose any formal support of Taiwanese independence forces or other separatist forces in China by Gulf countries’ governments, and to pursue possible and potential support from the Gulf region for China’s foreign strategy.

China’s core national interests in the Gulf have been in continuous evolution. Ideological interests have been abandoned and economic and trade interests, energy interests, and non-traditional security interests have emerged gradually during the last three decades. Chinese state-owned oil companies are now aggressively bidding for contracts in the Gulf, and there is a clear Chinese presence in regional commerce.

For many Gulf nations then, Beijing’s interest in the region clearly offers new and expanding business opportunities in the energy sector. However, energy commerce is not the only aspect of invigorated relations between China and Persian Gulf nations, especially Saudi Arabia and Iraq. China’s rise as an export power has also presented Middle Eastern merchants with the opportunity to travel to China in search of cheap goods, while the Persian Gulf is an increasingly important source of capital for Chinese financial institutions.

Historical Background

Since the 19th century the Persian Gulf region has been one of the most strategically important regions in the world in the global competition for power. This is due to three reasons: (1) strategically, for the great sea powers not to allow the Eurasian land power access to the ports in the Gulf (and later to gain control of the oil resources), and (2) due to the vast energy resources located in the region which became even more important after WWII. In addition, it is fair to add a third reason: (3) relations to Israel.

Since 1800 the Persian Gulf region has played a signicant security role in international affairs. For the British Empire the Arab Gulf states (Trucial States) played an important role as a station between Britain and India and they were British protectorates from 1820 up to 1971 when Britain withdrew from the Persian Gulf. In British naval strategy, the harbours of the Gulf have always played a crucial geopolitical role in containing the Great Eurasian land power, whether it was Russia or the Union of Soviet Socialist Republics (USSR), by blocking access to the sea in order to hinder the land power from gaining control of the high seas and thereby becoming a global hegemon.

The strategic role increased considerably as oil became a more important resource, which it especially did in 1912 when the British navy decided to use oil instead of coal, with the southern part of Iraq as the important supplier.

The combination of China’s foreign strategy, core national interests in the Gulf and the Gulf region’s strategic structure all determine China’s Persian Gulf policy, which has witnessed six phases since the late 1950s: (1) a focus on Iraq (1958-1967); (2) a focus on revolutionary movements in the Gulf (1967-1971); (3) opposition to Soviet expansionism (1971-1979); (4) a focus on Iran and Iraq (1979-1990); (5) a focus on Iran (1990-2001); and (6) a focus on Saudi Arabia and Iran (2001 till now).

In the 1950s and 1960s, the typical characteristic of the international system was the all-out confrontation between the Western Capitalist camp represented by the US and the Socialist camp represented by the former Soviet Union. The nature of the political institutions of the People’s Republic of China established in 1949 led to China’s policy of leaning to one side and forming an alliance with the Soviet Union. Against such backdrop, supporting the national democratic movement in Asia and Africa was a part of China’s policy against the West under the confrontation of two camps. The relationship between China and the Gulf countries was restricted by this background.

Currently: Energy, China, the Gulf and the US

At 3.73 million tons in 1959, China’s post-revolution oil production was very low. A century of dependence on imported oil and oil products ended in 1963. In that year, the Daqing oil field in northern China produced 4.3 million tons of crude oil out of a national total of 6.48 million. But this self-sufficiency did not serve the goal of economic and social development due to China’s relations with other countries. The Soviet petroleum and technological assistance that were critical for China’s oil industry were terminated in July 1960. Moreover, a U.S.-led embargo lasted from 1950 to the Sino-American rapprochement in 1971.

China was self-sufficient in energy, but the economy was on the verge of collapse. In the early 1970s, China’s international relations improved, leading to the expansion of the economy. Oil and coal became primary export commodities in exchange for industrial equipment and technology from developed countries. China took advantage of the 1973 oil crisis to export oil to Thailand, the Philippines, Japan and other Asian countries in order to cultivate a friendly regional environment for domestic modernization and development.

The hard currency earned from oil exports was spent on the import of technology and equipment to develop an export-oriented economy critical for development. China’s crude-oil exports reached a peak of 30 million tons by 1985, but declined afterward due to growing domestic consumption and slower growth in production.

China began to import crude oil from Oman in 1983 as a temporary measure to deal with the problems of transporting crude oil from northern China to refineries along the upper stretches of the Yangtze River. In 1988, Chinese imports of crude oil and oil products began to rise rapidly due to increased domestic demand. In 1993, China became a net importer of oil products and, in 1996, a net importer of crude oil.

China’s trade volume with the Middle East increased tenfold. The Gulf sits at a strategic juncture of the two main routes of China’s Belt and Road Initiative (BRI), and China’s economic interests in the region matches the Gulf countries’ effort to diversify foreign economic relations and restructure their economies away from a reliance on oil. China and national governments in the region have matched the Belt and Road Initiative with the latter’s national development plans, such as Saudi Arabia’s Vision 2030 and Qatar’s National Vision 2030. Bahrain has positioned itself as China’s gateway to Gulf economies just as Hong Kong to mainland China.

The Gulf is Beijing’s largest supplier of oil and second-largest provider of natural gas, while also accounting for about half of China’s exports to the Middle East. As China’s increasing oil import is expected to continue in the coming years with an enlarging gap between demand and domestic supply, Gulf will remain strategically important to China. In 2017, the top sources of China’s crude oil imports came from Saudi Arabia, Angola, Iraq, Iran, Venezuela and other OPEC countries.

China is becoming a major U.S. competitor for political influence in the Persian Gulf, and the United States is trying to check the growing Chinese diplomatic and political ties with key states of the region, such as Iran and Saudi Arabia. For their part, these states are increasingly turning to burgeoning relationships with Asia as the locus of oil exports. Already two thirds of the oil from the region is exported to Asia, and this is expected to grow.

China and the Persian Gulf

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China’s Policy in the Persian Gulf

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China in the Persian Gulf

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Is China Challenging the US in the Persian Gulf?

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Historical Evolution of Relationship between China and the Gulf Region

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Jorge Emilio Núñez

Twitter: @London1701

30th November 2018

Territorial disputes: The Persian Gulf (Part 19) [Post 179]

The Persian Gulf and Russia

Two factors account for a more assertive Russian policy in the Persian Gulf. One has to do with the reestablishment of Russia as a great power. The other involves a sense that the "near abroad" (republics of the former Soviet Union other than Russia) directly affects Russian stability and security; the Middle East, in other words, can affect the Caucasus and Central Asia, and through them Russia itself.

Prior to the collapse of the Soviet Union, authorities had created a solid foundation for the development of fruitful cooperation with the Arab world and Iran. After 1991, however, Russia largely neglected the potential to develop these ties. Political and economic contacts were mostly curtailed, if not cut. 

This situation was determined by a mixture of material and ideological reasons. The domestic economic and political turmoil of the 1990s limited Russia’s export capacities and diverted the attention of the authorities from foreign to domestic policy issues. The loss of Ukrainian ports (the main trade gateways of the Soviet Union to the Mediterranean) also hurt business contacts.

Furthermore, the active development of relations with Middle Eastern countries was against the ideology of the new Russian elite, which saw the country as a part of the Western world and was reluctant to develop those vectors of diplomacy that were either non-Western or actively developed under the Soviet regime.

As a result, Russia did not pay much attention to the Middle East unless its ties there helped to develop relations with the West. The only exception was Israel, with which relations improved considerably during the 1990s, mainly due to the fact that the country was considered a Western island in the Middle East.

Russia’s relations with the US became the predominant factor determining the dynamics of Russia’s dealings with Middle Eastern powers.

Officially, the increased frequency of Russian contacts with the Middle East since 2012 is connected to the overall changes in diplomacy caused by disputes with the US and the EU, particularly regarding activity in Syria and Ukraine. As a result of these tensions and in an effort to maintain its international significance, Russia tried to shift its focus from the West to non-European countries, including those in the Middle East.

In reality, the reasoning is more complicated. Russia’s policy towards the Middle East and Asia, although ostensibly aimed at improving relations with these countries, aims to create leverage that can affect the behaviour of the US and EU, and mitigate the negative effects of ongoing confrontation between Moscow and the West on Russia’s economy, security and international relations.

Russia, Syria and the Gulf

Gulf rapprochement to Moscow does not necessarily mean Russia will replace the US as its main Arab ally. UAE and other Gulf countries have far greater degrees of security and economic cooperation with the United States and the West than with Russia. However, Russia, the emerging power in the Middle East is simply seen as an alternative guarantor of their security.

Russia’s geopolitical influence and soft power in the Persian Gulf has increased since the start of President Vladimir Putin’s third term in 2012. Through stronger investment linkages and diplomatic overtures, Russia has attempted to carve out a more prominent geopolitical role in the Persian Gulf. Russia is unlikely to threaten Saudi Arabia’s hegemony over the Gulf Cooperation Council (GCC) bloc. But stronger relations between Moscow and Saudi Arabia’s closest allies have caused some GCC countries to be more receptive to Russia’s calls for a political solution in Syria. Saudi Arabia’s fear of being isolated from the Arab world’s consensus could cause Riyadh to eventually soften its belligerent anti-Assad approach and diplomatically reengage with Russia. This scenario differs dramatically from the Russian-Saudi collision course predicted by many regional analysts.

Putin has saved Syrian President Bashar al-Assad from sure defeat while supporting Iran’s intervention and ambitions in Syria, and at the same time, has managed to sell billions of dollars of weapons to their Gulf enemies. In the process, he has immensely enhanced Russia's presence in the region.

Investment and Energy

Russia’s combined trade with the GCC member states accounted for less than 1 percent ($2.51 billion) of the country’s total trade with the world ($467.1 billion) in 2016. Yet it accounts for about 26 percent of Russia’s total trade with the Middle East ($9.73 billion), according to the latest data from the International Monetary Fund (IMF).

But despite the volume of trade between the Gulf and Russia being modest, Gulf investments have begun to flow significantly into Russia. According to BMI Research, foreign direct investment (FDI) inflows into Russia climbed to $33 billion in 2016, driven by capital repatriation and the acquisition of a 19.5 percent stake in Russian oil giant Rosneft by the Qatar Investment Authority (QIA) and the Swiss mining company Glencore.

The improvement in Russian-Gulf relations has begun to impact global oil markets. Russia and Saudi Arabia, the world’s top oil producers, joined forces twice in the past year to cut production to lift prices.

Meanwhile, the Gulf crisis has reminded energy-consuming countries, such as China, India, Japan and South Korea, that the stability of the region could deteriorate at any moment. This may push these countries to widen their diversification strategy, giving Russia a golden opportunity to penetrate these important markets even further.

Russian Policy Across the Middle East

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Russian Ambitions in the Persian Gulf

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How Russia is Courting the Gulf

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How Russian Arms Sales Help Keep the Gulf Divided

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Why the Gulf Crisis Could Benefit Russia

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Russia’s Emerging Rapport with Gulf State Monarchies

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Jorge Emilio Núñez

Twitter: @London1701

29th November 2018

Territorial disputes: The Persian Gulf (Part 18) [Post 178]

The Persian Gulf and the United Kingdom

Origins

For a period of over one hundred and fifty years, from 1820 until its withdrawal in 1971, Britain was the dominant power in the Gulf. Like many other European powers – notably the Portuguese, the French and the Dutch – Britain’s initial interest in the Gulf region, which began in the seventeenth century, was driven by the development of trade and commercial interests. The nature of Britain’s involvement began to change, however, after it consolidated and expanded its colonial holdings in India.

As Britain began to deepen its mastery of India in the eighteenth century, the Gulf emerged as a peripheral concern of India, rather than as a strategic concern of London. As a consequence, British policy regarding the Gulf up to the Second World War was primarily formulated and conducted by the Government of India and not Whitehall. More often than not, Indian aggressiveness in the Gulf was stymied by London, which saw the Gulf as possessing only minor importance and certainly not worth jeopardizing grander strategy in Europe. Still, the Gulf’s role in Indian foreign policy was not entirely negligible.

Following the General Treaty of 1820, local Arab rulers agreed to a number of other treaties that formalised Britain’s dominant position in the region and limited their ability to act independently without Britain’s approval. The increased stability that this “Pax Britannica” brought led to increased volumes of trade in the region. Ruling families began to actively seek British protection as a means of securing their rule and safeguarding their territories.

UK Strategy

Containing or destroying this opposition has been a core focus of UK strategy, as has guaranteeing the survival of regimes considered friendly to British interests. This neo-imperial strategy has sought to secure a range of interests, circulating around access to the region’s crucial markets, bases and resources. Most obviously, securing access to, and control over, the huge oil deposits in the region is considered to be of vital importance.

The UK’s interest in the Gulf is about more than oil. Securing access to other markets, including defence and construction, also drives UK strategy towards the Gulf, as does, increasingly, ensuring that the UK is preferred as a site for Gulf investment. Having a secured military presence in the region also enables the UK to project its power beyond into Africa, the Indian Ocean and Asia.

The UK has, for decades, focused on combating regional forces which prove resistant to British and American interests. British intelligence was central to the 1953 overthrow of the democratically elected Iranian Prime Minister, Mohammed Mossadegh, after he began nationalising the Iranian oil industry. The Iranian Revolution in 1979 challenged US and UK dominance in the region, as did the invasion of Kuwait by Saddam in 1990.Today, a bewildering array of armed Islamist groups operate across the region, opposed to the presence of Western forces.

Brexit

Britain’s departure from the European Union will shape British foreign policy for years to come. Its relations with the countries of the Gulf Cooperation Council (GCC), with which the United Kingdom maintains deep-rooted military and economic ties, provide a useful illustration of what lies ahead. 

The UK’s increased engagement in the Gulf had been well underway for some time. The years since 2012 have seen an uptick in strategic and commercial agreements alongside an increase in trade. But Brexit’s economic cost, as well as the UK’s reduced global influence outside the EU, have augmented the perceived importance of relations with Gulf States. A recent series of declarations and official visits demonstrate that Britain is poised to intensify its commitment to the region. 

The prospect of a free trade agreement with the GCC, a rise in defence spending in the Gulf, and the reaffirming of bilateral ties with a number of GCC countries all underscore the UK’s renewed devotion to its regional presence. Geopolitical instability and human rights violations perpetrated by Gulf monarchies will do little to dissuade British policymakers from further strengthening relations with allies in the Persian Gulf.

The British in the Gulf: An Overview

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British and the Gulf

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Global Britain in the Gulf

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The British and the Gulf

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Jorge Emilio Núñez

Twitter: @London1701

28th November 2018

Territorial disputes: The Persian Gulf (Part 17) [Post 177]

The Persian Gulf and the Role of Outside Powers: The United States

Origins

The presence of vast energy resources and location at the center of the Middle East account for the Gulf’s geo-strategic importance and its attraction to major powers. U.S. involvement and military presence dates back to the early part of the last century, and includes a host of political, economic, and geo-strategic objectives. Prior to the Gulf War, U.S. military presence was largely over the horizon, accommodating the sensitivities of local culture.

Since its independence, the United States has had interests in and relations with the Middle East. Morocco was the first country to establish relations with the new nation, and in 1866 American missionaries established the Syrian Protestant College in Lebanon that later became the famed American University of Beirut. 

During the early part of the 20th century, business entrepreneurs were responsible for the major oil discoveries in Saudi Arabia. Furthermore, it was Alfred Thayer Mahan, the noted American naval officer and strategist, who coined the term “Middle East” as that area between Arabia and India “with its center—from the point of view of the naval strategist—in the Persian Gulf.”

US relations with that center began on September 21, 1833, when it signed a treaty of amity and commerce with Oman. Since then, U.S. involvement in the Gulf region has widened and deepened, given the increasing relevance of Gulf petroleum to the world economy, and the geostrategic importance of the region during the Cold War.

In 1971, Britain ended its military presence east of Suez, but the United States did not immediately replace it as the region’s dominant security provider. For the purpose of this analysis, the decade of the 1970s has a distinct practical function. It represents a period of transition from British to US hegemony in the Gulf.

Current Strategy

In today’s United States, this is illustrated by the especially vibrant debate surrounding the future of US grand strategy. Although there are shades of difference among proponents of alternative grand strategies, two perspectives have consistently dominated the current debate: offshore balancing versus deep engagement. At the core of this debate there is a profound disagreement on the benefits deriving from continued US security commitments abroad. 

Supporters of offshore balancing and of deep engagement differ on the extent to which the United States should be directly responsible for guaranteeing international security. 

This debate also includes the discussion of significant political and economic aspects of grand strategy, however, both camps recognize the special importance of the future nature of US military strategy.

Despite their many differences, people in both camps have consistently identified the Persian Gulf as one of the three regions, along with Europe and East Asia, vital to US national security. This domestic consensus on the strategic importance of Gulf stability has also been reflected in the policy documents of successive US administrations.

By the end of 2011, all major US military units left Iraq. US President Barack Obama had promised the complete withdrawal of US troops from the country during the 2008 US presidential campaign. The military withdrawal from Iraq was part of the Obama administration’s larger policy of  ”pivoting” toward Asia.

The meaning of the pivot toward Asia has been often equated to US disengagement from the broader Middle East and the Persian Gulf in particular. This is an inaccurate reading of the Obama administration’s strategy, especially with regard to the administration’s post-2011 security commitments to the Gulf. 

The real outcome of the pivot, in fact, was to give increased priority to Asia in addition to, and not instead of, priorities in the Gulf. The United States had no intention to disengage militarily from the Persian Gulf.

Debating US Military Strategy in the Persian Gulf

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U.S. Military Presence in the Gulf

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Jorge Emilio Núñez

Twitter: @London1701 

27th November 2018

Territorial disputes: The Persian Gulf (Part 16) [Post 176]

The Persian Gulf and the Role of Outside Powers

TERRITORIAL DISPUTES such as the ones in the Persian Gulf have to do with domestic and international elements. As Huth says “states leaders are both national security managers as well as domestic politicians seeking to maintain their position of influence and power. As such, the foreign policy goals of state leaders should reflect the pursuit of both external security as well as domestic political gain.”

Huth, Paul K. 2001. Standing Your Ground. Territorial Disputes and International Conflict. The University of Michigan Press.

After the collapse of the Soviet Union and America’s stunning success in the Gulf War, the United States stood virtually unopposed in the Persian Gulf region. 

Over the coming decade, however, the United States is likely to find itself on a more crowded playing field as several outside powers, notably European countries, Russia, and China, compete for enhanced influence and access. 

These countries, driven by geopolitical, economic, and strategic motivations, will pursue their own agendas, objectives, and priorities that will often clash as well as converge with U.S. policies and interests. Their support or opposition will be an important determinant of U.S. success in implementing its policy initiatives.

Central to the UK government’s new strategy is the establishment of a network of facilities and partnerships designed to secure a permanent British military presence in the Gulf. New and enlarged bases in countries such as Dubai, Oman and Bahrain will enable the UK to present a more assertive position in the region, and to safeguard the all- important outward ow of gas and oil.

At the same time, British arms companies continue to sell vast amounts of weaponry to support the Gulf states’ own military expansion. Since 2010, the UK government has approved over 6,000 individual export licences to arms companies serving the region, with a combined value of £16 billion.

In the broader universe of Moscow’s foreign policy, the Middle East generally ranks after the United States, Europe, and China and Asia. The Kremlin again sees Russia as a great power on a global scale, and as such it cannot ignore a region so close geographically, so rich in hydrocarbons, and so unstable socially and politically as the Middle East. 

Moscow’s withdrawal from the Middle East under then president Mikhail Gorbachev at the start of the rst Gulf War marked the decline of the Soviet Union’s superpower status. Russia’s reappearance as a player in the Middle East under President Vladimir Putin has the aim of restoring the country’s position as a great power outside of the former USSR. 

With the start of the military intervention in Syria in 2015, and the U.S.-Russian diplomatic e ort that accompanied it, the Middle East has become a key testing ground for Russia’s attempt to return to the global stage.

China’s rise is shaping up to be the most salient development of international politics and economics in the early 21st century, and Beijing is increasingly searching for stable sources of energy to power its ballooning economy. This has meant that China’s relations with resource-rich Persian Gulf states have become more intensive even as Beijing has become more pragmatic in its approach to the region.

Whereas once China viewed events in the Gulf region through the lens of its own revolutionary ideology, its relations with Middle Eastern nations are now driven more by energy concerns. Chinese state-owned oil companies are now aggressively bidding for contracts in the Gulf, and there is a clear Chinese presence in regional commerce.

The posts this week will center the attention on the role these external powers (mainly, the United States, the United Kingdom, Russia and China) have in the Persian Gulf.

The United States and the Persian Gulf

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The United Kingdom and the Persian Gulf

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Russia and the Persian Gulf

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China and the Perrsian Gulf

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Jorge Emilio Núñez

Twitter: @London1701

26th November 2018