Matthew Hulbert Forbes
‘Stick or twist’ sums up the changes of
political power in America and China in November 2012. President Obama won
another four year term in Washington, whileXi Jinping 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.
Team America
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 International Energy Agency and fully signed up to
the ‘U.S. energy independence’ narrative or not doesn’t really matter: The
Obama Administration believes 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.
