Vandana Hari, Nikkei Asian Review: Asia has most to lose if Middle East turmoil hits oil supplies
As US-Iran tensions, can crude importers defend their interests?
U.S. President Donald Trump says he might take military action against Iran to prevent it from acquiring a nuclear weapon. But he has indicated he won't necessarily jump in to protect international oil supplies from the Middle East if they are under threat from the Islamic Republic.
The position, articulated by Trump in an interview with Time magazine on June 17, should not come as a surprise, even if it appears to be at odds with the Pentagon beefing up aircraft carriers and troops in the Middle East in recent weeks, citing a threat from Iran.
As Trump spelt out in the interview, the U.S. is no longer as dependent on oil from the Middle East as it was, thanks to burgeoning domestic production.
Air Force General Paul Selva, vice chairman of the U.S. Joint Chiefs of Staff, emphasized the message a day later, pointing out that China, Indonesia, Japan and South Korea were heavily dependent on supplies moving through the Strait of Hormuz, and needed to protect their interests. U.S. Secretary of State Mike Pompeo has made similar comments.
The argument that the Gulf of Oman, where six oil tankers were attacked in the space of a month over May and June, is not as strategic to the U.S. as it is to countries in Asia, cannot be faulted. The U.S.'s crude import volumes, including those from the Middle East, have plummeted since its shale renaissance sent domestic output rocketing from around 2012.
Meanwhile, China, India, Japan and South Korea, Asia's four largest oil consumers, secure up to half their crude requirements from the Middle East. If seaborne shipments of oil from that region -- a majority of which pass through the narrow Strait of Hormuz adjoining Iran -- are disrupted, it would be nothing short of disastrous for these countries.
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WNU Editor: India has already deployed warships to protect its oil tankers .... India Deploys Warships To The Persian Gulf (June 21, 2019). Will China, Japan, and South Korea where half of their crude requirements come from the Middle East follow suit? I am willing to bet that if there is another oil tanker attack, the answer will be a yes. This is a massive shift on how the world views the Middle East. When Iran was America’s problem, much of the world was less than supportive. Flash forward to today, President Trump is making Iran the world’s problem. I call this smart strategy and policy.
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