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Maybe not quite yet, but the incentives for America to help keep Saudi oil flowing are falling fast.
NEW YORK — The year is 2030, and a crisis in the Persian Gulf once again threatens to become a debacle of global proportions.
As it has for decades, the region’s unique combination of repressive regimes, energy bounties, intra-Islamic rivalry and pent up popular frustrations explodes in violence. That rocks global markets, sends the price of oil sky high and prompts navies half a world away to put to sea.
The script may seem familiar. After all, the Gulf has roiled the world regularly since the Iranian Revolution of 1979 — through an Iran-Iraq war, the Gulf War, bombings in Saudi Arabia and Yemen of US military targets, the 2003 Iraq war and the 2011 Arab Spring. In each case, Gulf crises sent oil prices soaring and put the world on a war footing.
Yet by 2030, the cast has changed. Yes, the US Navy is still watching warily. And because oil remains a global commodity whose price is vulnerable to small disruptions, America remains concerned about the oil and gas flowing through the narrow Strait of Hormuz — the bottleneck that could in an instant take Saudi, Iraqi, Qatari, Kuwaiti and other energy supplies off the market.
However, over the next decade and a half, the fleets that really care will no longer fly the Stars and Stripes. More than likely, warships from a host of Asian countries — including Japan, China and India — will be regular visitors to the Gulf by that time. These nations, not the United States or its European allies, will have the greatest stake in preventing a calamity that could damage their economies.
For Americans, this may come as quite a relief. Ever since Britain’s Royal Navy lost command of the seas after World War II, the US Navy has provided something of a free public utility by ensuring that global commerce travels on the long, exposed sea lanes connecting major economies.
The incentives for the United States to bear this particular burden are changing. According to the US Energy Information Administration (EIA), by 2030 the share of US oil consumption fulfilled by Persian Gulf sources will have fallen below 35 percent. Perhaps it could drop even further, given the new productivity of old US wells, new discoveries off Brazil and the shale gas and tight oil revolution in the US Midwest.
But South and East Asia face a very different future. For China, Gulf oil will comprise 75 percent, according to the EIA. For South Korea, Japan and Taiwan, the percentage will be even higher. India’s suppliers are slightly more diverse, but even there over 60 percent of imports will flow from the Gulf in 2030.
Sliced a bit differently, the data leads the IEA to project that Asian economies will be importing 90 percent of Persian Gulf oil by 2030. Indeed, higher oil prices precipitated by a Gulf crisis — at some point — actually benefit a country producing as much oil as the United States will by that time.
“From a strategic perspective, the Achilles’ heel of China is its overwhelming dependence on Persian Gulf energy imports to fuel its rapidly growing economy,” says Samir Tata, a former US intelligence analyst and author on naval issues. “The sea lines of communication over which these vital oil and gas imports are transported by tanker … and the choke points linking them are controlled by the US Navy.”
The Obama administration’s “pivot” to Asia may be the beginning of an end to this free ride. Given the costs — both financial and political — of maintaining the US Fifth Fleet’s carriers, escorts and submarines in the Gulf, and the continuing pressure in Washington to curb expenditures, it may not be long before Asian nations have to guarantee their own oil supplies.
This means a very different reality on the high seas. Nature’s always a threat in the deep ocean. But since World War II traders have not feared political threats except in specific places relatively close to shore — the Red Sea off Somalia or the Gulf of Guinea on Africa’s West Coast, for instance.
That may change over the next several decades as new players start acting on new incentives.
Some regional strategists hope a common threat — the risk of an interruption in Gulf oil flows — may foster cooperation rather than competition. So far, that’s not been the case. If anything, the region appears as fearful of China as losing its energy supplies.
Last month, Japan and India announced they would hold regular naval maneuvers together in the Indian Ocean, augmenting the US-led naval maneuvers held annually — without China — since 2007.
Naval spending is also rising in Australia, Vietnam, the Philippines and South Korea. While few in official circles will say so publicly, much of this spending is likely directed at the threat of Chinese domination of vital sea routes. The plans across the region include six carriers, dozens of powerful surface warships and more than 100 submarines at a cost of some $220 billion by 2030.
That’s a regional armada that should keep Somali or Indonesian pirates at bay, to be sure. But it could also turn a reason for cooperation into a casus belli.
Michael Moran is vice president, global risk analysis at Control Risks, the global political, security and integrity risk consultancy.