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The Fight for Oil Interests between China and the U.S.A. Will Be a Protracted War

[Editor’s Note: A China Reviews News article expresses the belief that the intent of the U.S., U.K., and France’s air strikes in supporting the rebel forces in overthrowing the Qaddafi regime is to drive the Chinese companies out of Libya. The article further states that Western countries led by the U.S. are doing the same thing to China that they did to Japan in the 1940s, i.e., cutting off Japan’s access to oil, rubber, minerals, and other resources. The author believes that was the cause of the Pacific War in World War II. The entire article is translated below.] [1]

On April 24, 2011, China Review News, Beijing/ (website of Phoenix TV) published an article by Qiu Lin. According to the article, former U.S. Treasury official Paul Craig Roberts recently told Middle East media during an interview that Libyan ruler Muammar Qaddafi made two mistakes: He blocked the US Africa Command by not joining it, and he let China make major energy investments in Libya. Thus, it is not hard for us to understand why the U.S., U.K., and France continue to conduct air strikes on Libya and to support the rebel forces in overthrowing the Qaddafi regime. Their intent is clear: to drive the Chinese companies out of Libya.

Data show that China has 50 large projects in Libya, with a total investment of more than US $9 billion. China oil investments in Libya represent a relatively complete spectrum, including coverage, exploration, and oil extraction. However, it is still less than what China has invested in Angola, Nigeria, and Zambia. From Libya’s perspective, China is one of its major financial partners. It is the 3rd largest buyer of oil, behind only Italy and France. However, from China’s perspective, China’s main oil suppliers in Africa are Angola, Sudan, and Nigeria. They all supply more oil to China than Libya.

Nevertheless, China’s strategic interests in Libya are no less than in the above-mentioned African countries. As China’s dependence on foreign oil has continued to rise over the past decade, more than half of its overseas oil investment projects have been in countries and regions that have relatively high political risks. Libya is one of them. The reason China invested in Libya is mainly that China cares about long-term development, as the success in Libya relates to China’s over-all oil development strategy in Africa. This is to say, as long as China stays firmly in Libya, it will be able to use Libya as a base and then, little by little, gradually extend its path in seeking oil in Africa.

Of course however, these moves on the part of China have caused the U.S. to have special concerns. For the U.S., China is fighting for oil interests within its sphere of influence. The U.S. Department of Energy said that over the past decade, there has been a big gap between U.S. oil production and consumption; reserves are also declining. According to one prediction, by 2015 the U.S. dependence on imported oil will reach 70%. Thus, in the U.S. National Security Strategy report, protecting the safety of foreign oil sources has become a major focus.

In fact, since the beginning of the 21st century, the U.S. has successfully adapted to a new strategy to reflect its geographic oil interests. After 9.11, the U.S. launched two wars and took control of the world’s major sources of oil. In particular, the successful overthrow of the Sadat regime laid a foundation for the U.S. to control the Middle East’s oil resources. Through supporting the pro-U.S. Iraqi government and using economic, military, diplomatic, and other means to win over Saudi Arabia, Bahrain, Kuwait, and other Middle East countries, the United States is pleased to see that everything is moving in a direction that is good for its interests.

In order to expand the regions it controls, the U.S. now aims at overthrowing Qaddafi’s regime. Libya is the world’s 12th largest oil producer, accounting for 1.8% of the of world’s oil consumption and 6% of the oil production of The Organization of the Petroleum Exporting Countries (OPEC). Over 85% of Libya’s oil is exported to Europe, with the rest going mostly to Asia. The U.S. gets only 5%. The U.S. is thus extremely dissatisfied and has always looked for opportunities to get rid of Qaddafi’s regime. That opportunity has finally come. The U.S. used United Nations Resolution 1973 (the no-fly zone in Libya) and instigated France, the U.K., as well as other NATO countries to launch air strikes on Libya and support the rebel forces against the Libyan government. The U.S. is trying to overthrow the Qaddafi regime in one fell swoop.

On the surface, it seems that China and the U.S. have no conflict on the issue of Libya, but most people may have ignored one point. The current war in Libya can be compared to the one that the U.S. and U.K. launched against Japan in the 1940s. At that time, the U.S. and U.K. cut off Japan’s access to oil, rubber, minerals, and other resources. That was the cause of the Pacific War in World War II. Now, they are trying to do the same thing to China.

Analysts believe that China has become one of the strategic buyers in the world energy market. Also, due to the continued decline of its own oil production, it is predicted that, by 2030, China will need to import 10 million barrels of crude oil per day, accounting for more than 8% of the world’s oil demand. Exactly because of this, in order to meet the rapidly growing demand for oil in the upcoming years, China will have to have a battle with the U.S. for global energy resources. Of course, if the two countries view the issue of oil security with a confrontational attitude, they will both get caught up in the “Prisoner’s Dilemma.”

Since China became a net oil importer in 1993, without even realizing it, it has entered the battle with the U.S. for global oil interests. This is going to be a protracted war and it is not likely to end any time soon. The world’s top 20 major oil companies all belong to the U.S. and other Western countries. They monopolize 81% of the world’s proven oil reserves. If China wants to obtain a share of the global oil structure that it has painstakingly developed over the past one hundred years, a lot of interference and constraint will definitely be brought to bear. Moreover, in the future, China will inevitably have to compete with the U.S. in the global search for oil resources. Whether there will be any armed conflict is difficult to predict.

[1] China Review News, “The Fight for Oil Interests between China and the U.S.A. Will Be a Protracted War,” April 24, 2011