Has Putin Miscalculated?

oilprice |  While it was no surprise that China abstained when the UN Security Council voted to condemn Russia’s invasion of Ukraine, the abstentions from the UAE and India were more surprising. 

This vote highlights that Washington’s ability to counter the influence of China and Russia in the Middle East is limited. 

The fading influence of the U.S. in the Middle East is a result of its withdrawal from the Iran nuclear deal, its withdrawal from Syria, and its failure in Afghanistan.

Last week’s failure of the UAE and India – along with just China – to vote in favor of the UN Security Council’s resolution to condemn Russia's aggression against Ukraine and to demand the immediate, complete, and unconditional withdrawal of Russian forces from the neighboring country earned all three countries the explicit thanks of Russia. It also highlights the broader shift in the once clear-cut global political alliances to the two principal power blocs in the world: the U.S. and its allies on the one hand, and China-Russia and its allies on the other. 

Nowhere has this shift been more evident in recent months than in the cases of the UAE - which on 13 August 2020 became the first country to sign a U.S.-sponsored ‘relationship normalization’ deal with Israel - and of India. Saudi Arabia is on the same level, as is analyzed in-depth in my new book on the global oil markets, and reinforced this with the very recent statement that it is still committed to working alongside Russia in OPEC+. The clear and principal purpose of the U.S. in brokering these relationship normalization deals, and those that followed, was to counter the burgeoning influence of China and Russia in the Middle East. However, not only has the UAE in recent months been keen to distance itself from such a unipolar view of its global political allegiances but also now India – which had been intended by the U.S. as a replacement global bid for China in the oil market – has stepped back from fully committing the role envisaged for it by Washington. 

Shortly after the concept of the relationship normalization deals between Israel and as many countries in the Middle East and North Africa as possible had been originated in the U.S., various high-level sources in Washington let it be known that its new oil and gas market world order would, as far as the Middle East was concerned, involve Gulf states selling oil and gas predominantly to U.S. allies, including India, and that India as well would be the big back-up global bid for the commodities. This meant that in times of crisis, such as is now occurring in Ukraine, energy supplies to Western powers would not be subject to the potentially devastating threats that could proceed from Russia simply cutting off its gas supplies to Europe or, as has more recently happened with widespread sanctions against Russia, leave many U.S. allies in Europe scrabbling around to find alternative energy supplies. It was thought, as also analyzed in-depth in my new book on the global oil markets, that the relationship normalization deals would allow the U.S. and its allies to, in effect, corner large elements of the oil and gas supply in the Middle East. It was also thought by Washington that, by positioning India as the global replacement buyer for oil and gas instead of China, China’s geopolitical position in its own backyard of Asia Pacific would be weakened over time. 

There is every reason to expect this strategy to work, provided that the U.S. begins to ‘encourage’ the countries involved to understand that the new world order (as clearly heralded by the Russian invasion of Ukraine) is a zero-sum game, with one side ultimately winning at the other’s expense, and that all countries need to pick a side and be prepared to be judged by which side they pick. At the time that the U.S. made the decision to substitute China with India in the global oil and gas markets, military units of India and China had clashed on 15 June 2020 in the disputed territory of the Galwan Valley in the Himalayas. As also examined in my new book on the global oil markets, this clash reflected a much greater change in the core relationship between the two countries than the relatively small number of casualties might have implied. It marked a new ‘push back’ strategy from India against China’s policy of seeking to increase its economic and military alliances from Asia through the Middle East and into Southern Europe, in line with its multi-layered multi-generational project, ‘One Belt, One Road’ (OBOR). Until China dramatically upped the tempo of this OBOR-related policy – at around the same time as the U.S. signaled its lack of interest in continuing its own large-scale activities in the Middle East through its withdrawal from the Joint Comprehensive Plan of Action with Iran and its withdrawal from much of Syria – India had stuck to a policy of trying to contain China. With the announcement in August 2020 of the U.S.-brokered Israel-UAE ‘normalization deal’ it appeared that a new corridor of co-operation was being developed from the U.S. (and Israel), through the UAE (and Kuwait, Bahrain, and in part Saudi Arabia) to India, as a regional counterbalance to China’s growing sphere of influence.