This is a bit outside the box for FECOF... but, interesting because of that...
US presses China over Iran oil imports
Of key interest here is the element in the emerging potential for wider cooperation in relation to oil markets...
Of broad concern is not only the elements the article focuses on, but, the element in the risk in the global economic impact of a disruption of the flow of Gulf oil from Iran.
If China will cooperate in diversifying sources... that will tend to reduce tensions generally, and work against enabling the use of oil as a strategic weapon, in a way that might tend to encourage conflicts by drawing hard lines in market relationships, rather than a shared dependence on markets...
If it doesn't happen... and there is a conflict with Iran... it is more likely that the economic impact of the conflict will immediately weigh in, and far more heavily on Iran's customers than others... who have the benefit of alternative supplies and reserves in storage...
If diversification occurs... it will tend to lessen the global economic impact while also making it a less localized impact...
Of course, that will also work to enable the sanctions plan to be more effective in addressing Iran... and, it might also make a conflict with Iran more likely, it only because the thresholds in tolerance will be lowered on the one side, if the market impacts of a threatened disruption are already "baked in" and distributed more broadly... and there is less to lose on the other side, where they've already been cut off from the market themselves...
For China... it seems problematic... as they'd likely prefer not backing the U.S. policy, but, if they don't cooperate, it will tend to make them the primary victim of any disruption that does occur... so, they have interests they will have to balance...
And that process of balancing interests... might not be as far removed from the balancing of interests they're also engaged in with regard to the ASEAN countries and local oil interests.
China cannot pretend that it doesn't have a relationship with the U.S. that requires that they have interests in common... |
