News Letter

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Justine Salam / Hany Besada 51
SBE, Vol.20, No.1, 2017
ISSN 1818-1228
©Copyright 2017/College of Business and Economics,
Qatar University
European countries would be highly interested
in the natural gas reserves of Iran as a means
to address their energy dependence to Russia.
Overall, China now has to take into account a
complex geopolitical chessboard when playing
in the Middle East energy arena.
VII. The Chinese Challenges
of Securing Stable Oil
Supplies
Energy security is critical for economic security
and can influence the sustainable development
path, peace, and stability of a country. One of
the crucial points of energy security is securing
a stable oil supply. China, like many otherAsian
countries, has felt the impact of civil unrest and
conflicts in MENA because political instability
threatens to disrupt energy supply channels.
As a large importer and consumer, China is
very sensitive to the volatility of oil price and
supply. Olimat recommends that China avoid
a nationalist approach towards energy security
and/or establishingmilitarybases in the region90
while Sager argues that because China’s policy
is to protect energy routes, it will increasingly
engage in the security debates, seeking to have
a say regarding issues over oil transportation
(maritime security) and supply security91.
Energy security is not as simple it may sound.
Olimat discusses three main impediments
to energy security of China: (1) insufficient
domestic oil production; (2) China’s lack
of control over oil transport routes (sea and
land); (3) price fluctuation92. China’s lack of
90 Schenker, D.“China-Middle East Relations: AChange
in Policy?” Washington DC: Carnegie Endearment for
International Peace. 2013. Pp 68.
91 Sager, Abdulaziz. 2010. ‘GCC-China Relations:
Looking beyond Oil-risks and Rewards’, in Abdulaziz,
Sager, Geoffrey, Kemp (eds), China’s Growing Role in the
Middle East. Washington, DC: Nixon Center, 2010, Pp. 11.
92 Olimat Muhammad S., China and the Middle East:
From Silk Road to Arab Spring, Reprint Edition, NewYork,
Rougtledge, 2015. Pp. 82.
self-sufficiency has been discussed earlier;
however, we could add that Chinese presence
in MENA’s oil market creates a balance against
the United States’ omnipresence. Regarding
China’s lack of control over transportation,
China has attempted to move forward with
the creation of new pipelines, which would
ensure a relatively safe transport of oil. China
is moving away from maritime transportation,
as the Malacca Straits have limited waterways
and cannot meet the demand of oil tankers.
Pipelines are faster and provide a sustained
volume of transiting oil; they are also more
reliable and economically more efficient.
China is directing three pipelines in particular:
the Sino-Burmese oil and gas pipeline from
China to the Middle East; the Sino-Kazakh
pipeline from China to the Caspian Sea; and
the Sino-Russian pipeline from China to
Russia. China is hoping that through pipelines
and its multiply-routes strategy, it will increase
the security and reliability of its oil supply.
Finally, a fluctuation in oil prices could be
disastrous for China—and it has been. In 2008,
when prices of oil spiked at $147.50 per barrel,
China struggled to meet its growing need for
energy. Yet, the 52% fall of oil prices later 93
has played in China’s advantage. To balance
unstable oil prices, China adopted a strategy of
equity ownership in order to have more control
over the management of oil resources and
used it as a shield against price fluctuations.
However, this strategy created tensions with
Western states engaged in oil partnership in
MENA as they saw it as “a deceptive practice
seeking to place Western consumers in a less
93 Friedman, N. and Kantchev, G. (2015). “Oil Prices
Post Biggest One-Week Gain since 2011.” The Wall Street
Journal, February 6, 52
Available from
rise-again-in-volatile-week-1423218645 [Accessed 21
November 2015].