In the long run, the world is likely to be out of oil. Hence, the energy power play is shifting from the Middle East to Central Asia. As their economies demand more and more fuel, both India and China are focusing on the region to ensure an interrupted supply of oil and gas. But the competition is tough. The Americans and Russians are there too. The have set up military bases in the region to protect their pipelines. Wit the opening of China-Kazakhstan pipeline in December 2007, China has already secured much of the Kazakh oil. Working on a plan of making a new export corridor stretching from Kazakhstan’s oil rich Caspaian basin to China, Beijing is making sure that its oil supplies are not disrupted by a conflict, as it is the care with the present oil deliveries from the Persian Gulf and Sudan.
At present, China gets more than 15% of its oil from Iran. But, with the Iranian leaders playing with fire, China is now looking for cheap energy resources in its own backyard, even as it a contemplates a military base in Iran. As India approaches closer to its nuclear deal with the US, the proposed Iran – Pakistan – India gas pipeline is almost history. Even at the time of signing the nuclear deal, then US assistant secretary of state, Nicholas Burns had warned India that Iran was not a reliable long term supplier of fuel. He further advised New Delhi to turn to places like Kazakhstan and Turkmenistan. India is finally waking up to the huge potential of Central Asia as an alternative energy hub.
India and China’s unquenchable thirst for oil and gas is redefining global politics, trade and military alliances in our part of the world. With Iraq still burning and Iran also on the hit- list, a new conflict could knock out the region from the world energy scene. The global order is re-dividing into roughly two de facto blocs. One has the US at its core and the other has Russia – China at its core. Energy is the major dividing line between the two blocks. By putting the nuclear deal on the fast track, New Delhi too seems to be all set to join the US bloc and become an active participant in the energy war in central Asia.
The Americans have several bases in central Asia, including Afghanistan. The Russians, Nato and Chinese too have established military posts in the region. Even India can claim to have set up an air defense in the region. Even India can claim to have set up an air defense unit in Tajikistan. With the market analysts frequently talking about oil climbing up to $200 by early next year, now there is no doubt that another oil shock, which is worse than its previous avatar in the 1970’s and it is starting at all the energy – hungry economies, particularly India and China. The two Asian countries will continue to guzzle more oil to feed their booming economies, even as demand for oil would fall in the industrialized world.