‘Stick or twist’ sums up the changes of political power in America and in November 2012. President Obama won another four year term in , while assumed stewardship of China. This intricate ‘Chimerican’ relationship is fundamental to the global outlook anywhere you care to look, and nowhere more so than the Middle East. External security provision is still provided by the West, while economic pull has shifted to the East. Sounds a simple division of labour, but the ‘roles’ actually become very mixed up once you take a closer look. Squaring this awkward ‘Chimerican’ circle is going to be a tough ask for Gulf States to get right, but it’s absolutely critical to their geo-economic and geopolitical future to do so over the next four years.
From the U.S. perspective, the old mantra has always been that a threat to Middle East oil supplies correlated to a direct threat to American national security. This was explicitly spelt out in the 1980 Carter Doctrine that’s been the cornerstone of Washington’s role in the Gulf ever since. But times are now rapidly changing, and doing so, precisely because the U.S. has seen enormous hydrocarbon production growth on home soil. The initial energy ‘revolution’ was in natural gas, making America the world’s largest single (651bcm) producer, and’s now shifting towards liquids. U.S. oil production growth has been 500,000b/d over the past four years, with total liquids output expected to hit 11.4mb/d next year and onto 13-15mb/d towards 2020. That will make America the largest single liquids player in the world, surpassing even Saudi production numbers, with the obvious upshot that Washington no longer sees MENA oil as the valued prize it once was. Whether you’re like the Energy Agency and fully signed up to the ‘U.S. energy independence’ narrative or not doesn’t really matter: The Obama Administration it has sufficient ‘hydrocarbon’ space to pick and choose what it does or doesn’t decide to do to underwrite global energy supplies in future. That’s exactly what it’s going to do over the next four years.