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Empowering the Dragon: Political Implications of Evolving Chinese Demand for Gulf Oil and Gas
Abstract
Chinese energy demand is at the core of China-Gulf relations. Saudi Arabia was China’s top supplier of crude oil in 2021, accounting for 17% of Chinese oil imports. Qatar, a top natural gas supplier to China, secured multiple long-term natural gas deals with Chinese companies in December 2021. China remains a central market for Omani, Iraqi, Emirati, and Kuwaiti exports of oil. The chronic lack of economic diversification in the Gulf, where the oil and gas sector continues to account for a majority of public sector revenue, creates an indirect fiscal dependency upon major energy consumers such as China. This indirect dependency, however, is not evenly distributed across the region. China purchased approximately 83% of Oman’s total oil shipments in the first half of 2021, but most Gulf countries rely on a more diversified mix of energy-related trading partners. The United Arab Emirates – the third-largest Middle Eastern crude oil exporter after Saudi Arabia and Iraq – has shipped more oil to Japan than any other country in recent years. This paper addresses the following question: How does China’s evolving demand for the Gulf region’s oil and gas resources impact the political and diplomatic dimensions of bilateral relations. Focusing on Gulf Cooperation Council countries and Iraq, this paper argues that dynamic and uneven Chinese demand for hydrocarbon commodities produces varying and distinct political implications for Gulf Arab countries. The paper begins by mapping Chinese imports of Gulf oil and gas commodities during 2020 and 2021, then analyzes the political considerations underlying each energy-based partnership, and concludes by reflecting on how the global energy transition and renewable energy trends rest along the paper’s findings. The political economy focus of this work entails an approach that is inherently interdisciplinary, combining insights from economics and international relations. The paper draws heavily on quantitative sources – primarily trade-related data from international institutions, government agencies, and statistics centers. The author intends to gather additional qualitative data through oral, semi-structured interviews with energy experts. This paper adds a new scholarly dimension to three related fields: i) China-Gulf relations, ii) international political economy of Gulf Arab states and iii) the global energy transition. Future researchers can use this paper presentation and the associated publication to better understand the multifaceted nature of Chinese engagement across the broader Middle East.
Discipline
Political Science
Geographic Area
Arab States
Arabian Peninsula
Bahrain
China
Gulf
Iraq
Kuwait
Oman
Saudi Arabia
UAE
Sub Area
None