From the Syrian civil war to Yemen to energy, China has a larger role to play in the Middle East

The Middle East faces a transition to a post-oil economy, impeded by great power interference and inter-regional rifts

Solutions should come within the region, but Beijing is uniquely positioned as a partner, mediator and customer

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Published: 9:00am, 13 Nov 2019Updated: 9:04am, 13 Nov 2019

On November 17, Saudi Aramco will launch what is likely to be the biggest IPO in history. Valuations of the Saudi oil giant, the world’s most profitable company, vary by over US$1 trillion. This reflects both the continuing importance of oil to our global economy, but also two great uncertainties facing the company and the region as a whole.

The first uncertainty is regional security. A recent drone attack on Aramco facilities, which instantly knocked out 5 per cent of global oil production and rattled markets, was a reminder of how fragile oil supplies are in an age of growing volatility and asymmetric threats.

The second uncertainty is the future of oil itself. Finite supplies, mounting climate change concerns and the shift to cleaner fuels cast a shadow over future oil revenues. Indeed, one reason for Aramco’s IPO is to raise funds to help the Saudi economy prepare for a post-oil future.

In many ways, Aramco’s historic offering embodies the promise and challenges facing not just one company, but the entire Gulf region.

The Persian Gulf’s energy riches have long made it an arena for great power competition. This has stirred tensions in a region of complex religious and ethnic fractures.

The Gulf Cooperation Council was formed in 1981 to promote multilateral cooperation in the region, but the outbreak of the Qatar diplomatic crisis in 2017 highlighted its weaknesses. As US strategic interests in the Gulf shrink, with its reduced need for oil imports, its abrupt policy shifts in the region have undermined the view of Washington as a stabilising force.