Fuel fears

PUBLISHED : Thursday, 14 June, 2012, 12:00am
UPDATED : Thursday, 14 June, 2012, 12:00am


The Shanghai Co-operation Organisation ended its 12th summit in Beijing this month with a statement signed by all members, clearly expressing the group's opposition to any type of military attack on Iran. It particularly revealed China's concern about a US-led attack on Iran, a country of strategic importance for Beijing.

Dominated by China and Russia, the SCO has sought to encourage regional security co-operation among its members while the West facilitates its military presence in Central Asia either through Nato, or through national armies, mainly the US military. The growing Western presence has been a source of concern for China and Russia.

The SCO's meeting dealt with various issues of concern, including those related to Afghanistan and Syria. Yet, the case of Iran is different for various reasons, including the country's capabilities and its significance as a rising regional power.

Iran is especially important to the SCO heavyweights, above all China - the most vocal member against the UN- and US-led threats and sanctions against Iran.

Strategically, Beijing is concerned about the US efforts to turn the multipolar international system into a US-led unipolar one. Weakening and eventually neutralising regional powers is necessary for the success of such a plan, which the Chinese see as an objective in Washington's dealings with Iran. American success on that front would only make China more vulnerable to US/Western pressure, when it needs at least three more decades of peace to address its developmental issues.

Any expansion of the US military presence in China's proximity - as a consequence of a US-led attack on Iran - would also be unacceptable to Beijing.

China's strategic reasoning is also tied to Tehran's abilities to affect events in the Arab oil/gas-exporting countries that are important for Beijing as energy suppliers and markets for exports.

With one of the world's largest reserves of oil and gas, Iran's long-term role in China's energy security is crucial. Currently, it is a major oil supplier to China and is due to become a supplier of liquefied natural gas once its projects are completed. Over the years, China has made large investments in Iranian oil and gas projects, despite America's punitive measures to deter such investments in Iran.

Beijing is also opposed to any attack on Iran due to concern over oil price hikes. China is heavily dependent on energy imports, especially oil, whose prices have been increasing since the late 1990s. China's impressive growth in gross domestic product has slowed since 2007, partly because of problems in its major trading partners, including Europe, the US and Japan. Rising oil prices will not only slow Chinese growth even further, but will also hamper its trading partners' recovery. Any attack on Iran would surely see oil prices rise, worsening the economic outlook for all.

Clearly, a host of strategic and immediate concerns justifies China's opposition to a military attack on Iran. The SCO's firm opposition to such an attack reflects its attempt to seek an eminent role in the expanding multipolar system.

Dr Hooman Peimani is the head of the Energy Security Division and a principal fellow at the Energy Studies Institute, National University of Singapore