History does not follow a straight line, and we forget this at our peril. The internal combustion engine that powered much of the twentieth century will largely disappear in the twenty-first, and while the sources for future supplies of electricity are not well known, electric power will own the future. Some in the United States have rejoiced that the decline of oil and gas will soon mean the end of U.S. interests in the Middle East. It is, in fact, not so simple.
Oil and gas will not be strategic commodities in the distant future, but they are certainly strategic now, as Russia’s invasion of Ukraine roils global energy markets and threatens Europe’s heating supplies for winter. This is no short-term crisis, though.
The reason, counterintuitively, is because so many are seized with the end of the oil age. Many investors are unwilling to invest in energy exploration and energy infrastructure, in part because of hostility to the oil and gas sector for environmental reasons, and in part because of an expectation that new investments have a life cycle too short to recover the costs. Refineries supplying gasoline to the East Coast of the United States, for example, cannot begin to meet demand, but it has been decades since one has been built, and no one will build another again.
While the conventional wisdom is that oil and gas prices will softly glide downward as demand sags, it is unlikely to play out that way. Old oil fields produce less than new ones, and with exploration diminishing and investment in existing fields declining, the more likely outcome is a period in which supply declines more rapidly than demand, putting upward pressure on prices. One could argue that a price hike is beneficial in the long term because it would make alternative fuels more competitive. But before it did that, it would force the world’s attention back to the Middle East, where state-owned producers can afford to invest in production, and where they have a strategic interest in extending the oil age by moderating prices enough to slow the adoption of alternatives. These producers argue that there is an environmental logic to their renewed centrality, since their production has the lowest carbon footprint in the world, on top of the world’s lowest production costs. In fact, a number of factors are likely to combine to give the Middle East an ever-larger share of global production and maintain that share as alternatives come online.
Yet, for many in the United States, there is a rush to the exits in the Middle East as talk grows of an enduring contest with China. With growing U.S. concern over Chinese actions in the Pacific, the Middle East seems like yesterday’s battle. The “No War for Oil” battle cry that arose 20 ago has returned, with environmentalists joining the chorus.
As the United States turns to Asia, China is patiently making inroads in the Middle East. China advertises itself as the antidote to U.S. hegemony. It offers no lectures on governance and asks for nothing other than pure commercial terms. China’s interest feels as palpable to leaders in the region as the United States’ supposed disinterest.
China’s interest, though, is measured. In fact, China is even more eager to free itself from reliance on the Middle East than the United States is. China sees its reliance on the Middle East as an enduring vulnerability. The country not only lacks the military force to protect its interests there, it also fears that the United States could quickly cut it off from the Middle East’s energy in the event of a conflict. China lacks deep reserves of oil and gas like the United States. It has domestic coal, which badly fouls the air in Chinese cities. China’s government perceives a need to exit the oil age even more acutely than the United States.
And yet, China has a measured and realistic attitude toward the Middle East. While government officials have a keen interest in weaning the country off the Middle East, it is accompanied by an acknowledgment that ties need to grow stronger before they grow weaker. China is positioning itself well for a period of heightened global focus on the Middle East.
The United States is leaning the other way. It is as if the country knows how the story ends, and it is eager to skip all the chapters in between. Yet, much will happen before we get to the end of the story.
The United States needs to position itself for what will happen in the medium term before it positions itself for the long term. The U.S. military is wise not to sharply pivot from the region, despite pressure to focus on the Pacific—where U.S. allies such as Japan and South Korea are already deeply reliant on Middle Eastern energy. The Biden visit to Saudi Arabia in July was a constructive move in this direction, too. Building sustained patterns of cooperation, embracing shared projects, and helping partners diversify their economies is not only smart in terms of a global competition with China, but also in terms of advancing the interests of the United States and its allies.
Few Americans have much patience for the Middle East anymore, but patience is exactly what is called for.
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