On the verge of a big redivision: China enters into an energy war

Whoever says anything there, but all the major geopolitical conflicts unfolding in recent times are part of the Great Energy War, which in its scale already deserves world status. Why not touch on - the Washington-inspired attempted coup in Venezuela and the ensuing events, the US "hitting" Iran or its attempts to "step on the throat" of Nord Stream-2, either oil or gas loom everywhere for the officially announced reasons for what is happening , or both. And if to be absolutely specific - the burning desire of the United States to become an absolute global hegemon also in the energy markets, sweeping away from them all those who do not agree to 100% go in the American channel.

Perhaps, if the current owner of the White House did not wake the slumbering (or pretending to be slumbering) great Chinese dragon, the Celestial Empire would not have climbed into all this wreck. Or she would have joined it a little later and not as abruptly as now. However, the fact remains - today Beijing comes into play, where policy intertwined in the closest way with oil and gas flows, pursuing, as usual, to him alone guided and understandable goals. Be that as it may, the main sides in the ongoing confrontation have already been determined, whether voluntarily or involuntarily, but China will act in it for someone as an ally, and for someone as an adversary. What steps should the United States be wary of, and which ones should Russia? What battles should we expect in the near future on the new “fronts of the world energy war?”

Iranian Breakthrough

Beijing dealt the first blow to Washington’s interests without trifling. What’s called, crashed with all my heart! The other day it became known that during a recent official visit to China, the Minister of Foreign Affairs of Iran, Mohammad Javad Zarif, a grandiose agreement was reached between the two countries. According to this, the Chinese comrades intend to invest at least $ 280 billion in the development of the oil and gas and petrochemical industries of the Iranians. In addition, an amount of 120 billion in the same currency will be allocated by Beijing to modernize the country's industrial and transport infrastructure. Investments must be fully invested and disbursed as soon as possible - literally one five-year period, which will follow from the moment of signing the corresponding agreement. Further Chinese investments in Iran the economy assumed with the highest degree of probability ...

It would be naive to expect that making such investments, Beijing did not receive in the future cooperation possible preferences to the maximum and even above it. Not only will Iranian energy resources go to the Celestial Empire from now on with a colossal discount (from 12% to 32% of world prices, according to various sources), so the Chinese will be able to pay for them with a delay of up to two years! Sanctions, speak? What are the sanctions ?! The high contracting parties have already agreed on future settlements, either in RMB or in other currencies, which the PRC receives from numerous of its own projects, successfully functioning, for example, in Africa or in the post-Soviet space. And no dollars. The USA, too, receives a blow to the most sensitive place. The list of “bonuses” for Chinese companies negotiated should include their priority right to participate in any new or previously “frozen” projects in the fields of extraction and processing of energy resources in Iran. In fact, the ability to choose which ones they are interested in and which not, and take over the most profitable things by ruthlessly wiping any competitors.

Harmless deal conditions, isn't it? However, one should not be surprised at such unprecedented generosity of the Iranians or consider them, excuse me for saying a word, suckers. In addition to the colossal financial and technological “injections” into its own economy, which is now, to put it mildly, far from in the best condition, Tehran is gaining something else, much more significant. Security guarantees! China intends to deploy at least 5 thousand of its military in the country - to protect its own investments, and, moreover, "in order to ensure the complete safety of oil supply routes." In the Persian Gulf and the Strait of Hormuz - including. Well, where can the United States and all its aircraft carriers go after that? That's it, right there ... The question of whether at least one American bomb will fall on Iran, whether at least one missile will be fired at it, closes by itself. Washington was afraid to get in touch with Tehran, even one on one. Or rather, if there are any allies in the form of the same British or Saudis. Now, the Iranians, hiding behind the PLA, will be able from the bottom of their hearts to do ships that are depressingly sticking out from their shores under star-striped flags, any kind of offensive gestures and even allegorical gestures. They certainly won’t dare to touch them. Well, finally, Iran is gaining a stable and huge market for its own oil - albeit with deferred payments, albeit at a tremendous discount, but it is in any way better than “zeroing” the exports that Washington so threatened.

“Retreat” in Venezuela

At the same time, China, quite unexpectedly for many, began to curtail not only its own cooperation with Venezuela in the field of energy supplies from there, but also all its own projects related to the oil industry of this country. It all started with the fact that over the past few months, Beijing suddenly began to sharply reduce the volume of purchases of "black gold" from Caracas. This decision is very painful for a Latin American country, which is already going through hard times. China, which at the beginning of this year imported more than 300 thousand barrels of Venezuelan oil a day, and being its largest buyer, began to “lose ground” back in July, reducing consumption by 40%, which became the minimum monthly indicator for five years. Then things went even worse - China National Petroleum Corp. (CNPC), in August-September, generally suspended the loading of the “black gold” there in its tankers, which was officially announced by its representatives. And this is not the worst of News for caracas. Much sadder is the fact that the Chinese side has begun to curtail joint oil refining activities with Venezuela, abandoning the most important projects for this industry.

So, starting on September 3, CNPC representatives notified the Venezuelan PDVSA of the cessation of work on the previously planned increase in the capacity of plants for mixing “heavy” and “light” grades of oil by 57%. These were carried out at a refinery owned by Sinovensa, a joint venture of CNPC and PDVSA. But the Venezuelan state energy corporation has already hastened to declare that the ongoing modernization will increase technological the complex’s capabilities before processing, first up to 165, and then up to 230 thousand barrels of “black gold” per day. It should be noted that the refinery in question is, in fact, a key link in the production chain in the so-called Orinoco Belt, where today almost half of Venezuelan oil is produced. It would be difficult to imagine the worst “gift” to Caracas. As the official reason for the decision so painful for the Venezuelan side, the Chinese call the 52 million dollars that PDVSA owed them starting in 2018. It seems to be logical, but something does not add up ...

If the problem consisted solely in the outstanding loan, it could be solved, for example, by offering Caracas to pay with the same oil. However, Beijing does not increase, but stops its supply! The Chinese comrades categorically do not like to part with their own investments and, as we see in the case of Iran, is ready to bet much larger amounts on the line. 52 million is not the kind of money that would make China suddenly decide to “freeze” potentially beneficial cooperation for itself. Oh, something, but they know how to take their own at least that way, at least that way. Sanctions that Washington is threatening to all who continue to support the legitimate president of Venezuela, Nicolas Maduro? Yes, the argument is powerful. If the restrictions are not lifted, Chevron and four other oilfield service companies from the United States intend to curtail their activities in the country no later than next October. But let me! If Beijing were so afraid of American sanctions, then it would not have approached Iran for a cannon shot, but would not have prepared to invest hundreds of billions in the economy of this country and buy its “forbidden” oil in huge volumes. No, your will, there’s something completely different ... Perhaps, the time has come to talk about the most interesting aspect in all the events described above - the Russian interest in them.

On the verge of a big redistribution?

By no means claiming the ultimate truth, I venture to put forward a version: everything that’s happening is part of a kind of “big deal” between the two countries that have recently found more and more intersection points in precisely confronting the climbers, wherever and wherever possible , United States. This, of course, is about Russia and China. What if Moscow and Beijing simply agreed to divide the spheres of influence in the field of energy production and now begin to implement the agreement? There are good reasons for such an assumption: I recall that Rosneft announced its rejection of previously planned projects for investing in the production of “black gold” in Iran at the end of last year. True, talk of possible projects of this kind continues to this day. Not so long ago, such thoughts were voiced, in particular, by the Minister of Energy of the country, Alexander Novak. However, according to him, we are talking about investments in the range of 10 billion dollars. The figure, you see, is completely incomparable with the Chinese scale. And earlier, the same Rosneft was planning to invest a maximum of 30 billion in the Iranian oil and gas sector. The Chinese need the oil there - please. They will get it. But we can’t leave Venezuela in any way. To begin with, this state owes us $ 3.5 billion. This, by the way, is according to Vladimir Putin. There are, however, more compelling reasons.

Venezuela is the only, with the exception of Cuba, Russia's strategic ally overseas. Its maximum proximity to the United States makes this country an indispensable bridgehead in any geopolitical scenario. And the involvement of the same Rosneft in the energy sector of Venezuela is such that no Chinese have ever dreamed of. And, by the way, the "heavy" oil there is quite acceptable as a raw material just for our refineries. Among other things, it is this country that is the most promising in the whole world, in terms of oil production development, if only because it has the largest reserves of “black gold” on the planet. The word is right, an enviable jackpot, for which our country should fight for, living not one day, but thinking about prospects. It is not without reason that it is precisely Rosneft’s cooperation in Washington that causes utter irritation, turning into a real rage. The other day, the US Special Representative for Venezuela, Elliott Abrams, again attacked our company, threatening it with sanctions. At the same time, the Russian oil giant responded quite calmly to this demarche, promptly warning the Americans that the reaction to any “attempts to illegally expropriate Russian investments” would meet a corresponding reaction. The subtext of the statement was completely unambiguous even for the most stupid politicians: “We won’t leave anywhere from Venezuela! And don’t hope. ”

Well, against this background, a clear distribution of zones of “energy interests” between China and Russia would look quite logical and mutually beneficial. A weighty argument in favor of precisely this assumption is the buildup of energy cooperation directly between our countries. Let me remind you that starting from December 1 (earlier than the previously scheduled time), the Power of Siberia gas pipeline should be launched, through which Russian gas flows to China. Gazprom CEO Alexei Miller predicts the supply of one trillion cubic meters of “blue fuel” to the Celestial Empire in the next 30 years! Moreover, literally this Monday, during a working meeting with the head of our gas concern, Vladimir Putin instructed him to work out the possibility of gas deliveries to China using the so-called “western” route: through the territory of Mongolia. Getting partners in the largest gas importer in the world is worth a lot. It seems that Moscow and Beijing have finally agreed on this issue. Perhaps this, too, is part of the same “big energy deal”.

The redistribution of the world economic map is not just inevitable, it is already happening, here and now, before our eyes. Which country is the main “engine” of this difficult process to explain, I think, is not necessary. I would like to believe that Russia will participate in it as an ally and partner of China, and not get it in opponents and competitors, especially in vital sectors of the economy for us.
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  1. Sergey Latyshev Offline Sergey Latyshev
    Sergey Latyshev (Serge) 11 September 2019 12: 17
    Yes. Oligarchs to them gas, China to them money. Not bad.
    1. Nick Offline Nick
      Nick (Nikolai) 11 September 2019 16: 13
      Quote: Sergey Latyshev
      Yes. Oligarchs to them gas, China to them - money. Not bad.

      You would first understand the concept of the word Oligarch, and only then talk about who, whom, where and how much, and for how much ...
      1. Sergey Latyshev Offline Sergey Latyshev
        Sergey Latyshev (Serge) 12 September 2019 11: 03
        Everything is already taken apart before us.
        The oligarchs are those who control financial flows. And it doesn’t matter - private traders, officials, deputies or modest advisers.
        1. Yuri Nemov Offline Yuri Nemov
          Yuri Nemov (Yuri Nemov) 12 September 2019 17: 01
          Well, if the whole world lives like that, including your beloved USA, what can you do? The oligarchs are the inevitability of human civilization. So the Communists tried to live without them, and they didn’t stretch for 80 years, in terms of history it’s just scanty. It turns out that without them in any way. Everyone lives like that, even China - no matter how he tries to seem popular.
          1. Sergey Latyshev Offline Sergey Latyshev
            Sergey Latyshev (Serge) 12 September 2019 17: 38
            It turns out, it does not work out - time will tell.
            if inevitability - means the inevitability of your ardent love for the same USA, because are there the most oligarchs and rich?
        2. Nick Offline Nick
          Nick (Nikolai) 13 September 2019 16: 58
          Quote: Sergey Latyshev
          Everything is already taken apart before us.
          The oligarchs are those who control financial flows. And it doesn’t matter - private traders, officials, deputies or modest advisers.

          Oligarchs are those who control power, using it in their own interests, contrary to the interests of the state and society.
          1. Sergey Latyshev Offline Sergey Latyshev
            Sergey Latyshev (Serge) 16 September 2019 09: 00
            Not really, IMHO.
            There are oligarchs who clearly do not climb into power, and there are - who are in small or large contra.
            What they use - yes .... but how. And contrary - this is how power decides, contrary or not ....

            Putin, for example, and for Chubais mountain, and for some others ... and Luzhkov and someone moved ...
        3. maratkoRuEkb Offline maratkoRuEkb
          maratkoRuEkb (Marat) 16 September 2019 12: 30
          Rosneft and Gazprom are state corporations ... does it mean we have an oligarch state? Wow! and liberda bliss that 75% of the economy belongs to the state, you open their eyes to them, show that the whole economy belongs to the oligarchs.)
          1. Sergey Latyshev Offline Sergey Latyshev
            Sergey Latyshev (Serge) 17 September 2019 10: 36
            Didn't you know?
            And Chubais, and Miler, and Shubovladetel - all government officials to one degree or another, all state corporations ... And you yourself with the Liberda ...
  2. gorenina91 Offline gorenina91
    gorenina91 (Irina) 11 September 2019 18: 35
    - Well, slobbery and a timid, compliant policy are harmful for everyone - both for Russia and the USA ...
    - Yes, the Americans were unlucky with Trump - this elderly guarantor began to perform the same indecisive actions in foreign policy that Russia did in relation to China ... - And the "result" was not slow to show itself ...
    - It seems that the Americans began to lose to China in all directions ...
    - And not only Iran entered into "relations" with China ... but also the President of the Philippines

    announced the decision regarding joint economic activities with China in the exclusively economic zone of the Philippines ... (this is the zone that is prescribed in the Philippine law). This is a joint project of Manila and Beijing on the exploration of oil deposits in the Reed Bank area (Reed Bank). This is a reef-island site in the South China Sea north-east of the disputed Spratly Archipelago.
    Earlier, an international court in The Hague put up a barrier to China’s participation in exploration in the Reed Bank area, citing the fact that the islands do not belong to China.

    Rodrigo Duterte said China’s participation in the project is economically viable for the Philippines. According to him, there are agreements with Beijing on the division of deposits in the Reed Bank in the proportions of 60 to 40 (60 - Filipino, 40 - Chinese) ...

    - And before, the US constantly called itself

    the main ally of the Philippines, protecting this country from Chinese encroachments, including on the disputed islands.

    - But the President of the Philippines Duterte decided to remove this tension by offering China cooperation in the development of mineral resources near the disputed archipelago ...
    - And here the Americans are completely bummer ... - Such are the things ...
    1. gorenina91 Offline gorenina91
      gorenina91 (Irina) 11 September 2019 18: 43
      - And what about Russia ... Why, if China and Iran go well (there is no doubt about that), then ... then ... then ... then Russia will soon have to wind down all "its affairs" in Syria and leave this region ... - there is no point in staying there ... And it seems that Russia has nothing to do in the Middle East ...
      - Not only the United States is losing its party, but Russia, too ... - Alas ...
      1. SANDRO Offline SANDRO
        SANDRO (Sandro) 12 September 2019 08: 35
        Russia / USSR (I am writing together, since in external relations it is one and the same), in the Middle East never had any business! The only occupation was (and is) support of the Arab states opposing the USA and Israel, often to the detriment of their own people! Today, the Russian people are being told that Syria is the heartache of all Russia, and everyone is obliged to suffer at least a little for it! Or maybe it's enough, finally, to deal with "Foreign Policy", and the colossal funds that go to help the "Bratsk" countries, turn to the needs of the country ?!
  3. jack clubs Offline jack clubs
    jack clubs (Eugene) 11 September 2019 19: 24
    This is Russia's largest defeat. And Trump's victory. He cuts off China in the American hemisphere, and puts Russia in a hopeless situation. We now simply have no choice left to ally with anyone, as with Europe and the USA. Well, as in previous wars, we were left with no choice in an ally, and that was the worst fit.
    And as soon as Iranian gas and oil go to China, Gazprom will become unnecessarily. No wonder they were not particularly invested in all sorts of eastern flows. It remains only to further predict our departure from Syria. This is the next move of Beijing and Tehran.
    This is not Obama for you.
  4. Roarv Offline Roarv
    Roarv (Robert) 11 September 2019 21: 41
    Well, the oil market is on the verge of a grandiose heap - a collapse in barrel prices is just around the corner. If the sum of $ 280 billion of Chinese investments in 5 years is not fake, then our cabinet, the fuel and energy complex, as well as the energy market, will receive a STABILIZER.
    1. Bakht Offline Bakht
      Bakht (Bakhtiyar) 12 September 2019 00: 41
      And what is the reason for the collapse in oil prices?
    2. gorenina91 Offline gorenina91
      gorenina91 (Irina) 12 September 2019 08: 13
      -That I have written about so much, many, many, many, many times ... to my great regret, it is starting to come true ...
      This is what Russia's "friendship" and "constant support" of Iran led to ... Now China itself can easily turn from a consumer into a great exporter of hydrocarbons ... And China will easily crush our stupid Gazprom on the international market (and our other "earners" including) ... - Who and what can prevent him from doing this ???
      - China quite easily and without any special undertakings will buy up all our Russian gas and oil fields - it will simply become the owner of all this "real estate" ... - Yes, that's right ... - And it will be - even by steamships, at least by trains, at least by gas pipelines, at least by air, to supply all this stuff ... - even to your home ... even to the countries of the Asian world ... - even to Zap. Europe, which has already been waiting for it with might and main ... - And now China does not really need the "Silk Road" ... it has already become not so urgent ... - Why such costs for transportation for thousands of kilometers ... - China over time .. will simply transfer all its "craft production" to Zap. Europe and he himself will move there with half of his Chinese population ...

      Well, the oil market is on the verge of a grandiose heap - a collapse in barrel prices is just around the corner.

      - Ha .., why are prices suddenly collapsing ???
      - On the contrary ... - the possibility of a new broker appearing on the oil market can cause a stir and a sharp jump in prices ... - Yes, and then the Saudis will have to "get along" with China and "find parity" ... - where will they go .. ...
      - So ... - Russia becomes just ... an "extra link" ... - Alas ...
      1. Bulanov Offline Bulanov
        Bulanov (Vladimir) 12 September 2019 11: 23
        A couple of torpedo attacks from unknown submarines on tankers from Iran to China - and it will be cheaper to transport oil by rail tanks through Russia to China. And Syria is the cradle of the Orthodox religion, and you cannot abandon it. It is necessary to accelerate the creation of the shipping company Crimea-Syria for the development of trade. In Syria there are products that are not in Russia, and vice versa.
        1. gorenina91 Offline gorenina91
          gorenina91 (Irina) 12 September 2019 12: 02
          - Ha, the province went to write ... -Hahah ... - Yes, Trump has little guts even to strike Iran with stale tomahawks (as the Negro Obama constantly did when he wanted to scare someone) or to inflict a bomb attack from the air; and to start some kind of underwater "Star Wars" ... - this is ... and it is completely unrealistic ... And for some reason, Trump's military commanders do not really obey; the impression is created that the American Pentagon is not at all on the side of Trump (he is a commander without an army) ...
          - Yes, and Israel has its tail between its tails in relation to Iran ... Then no, no ... yes, and will launch a bomb attack ... - either on the Iranian nuclear center, then on some other Iranian facility ... - Syria Bombs out when he pleases and comes up with reasons on the go (and no S-300, S-400 and other "troubles" stop him) ... - But Iran is afraid to touch ... - So that's it ... - China scared them ...
          - As for Syria, then this card is a bit ... - Syria is no longer needed by anyone ...
          - Of course, compassionate Russia will have a very long time to go out with Syria ... - send humanitarian aid, rebuild cities, build hospitals, schools, etc ..., i.e. spend enormous funds taken from Russian taxpayers and pensioners (when they themselves have endless floods and fires) ...
          1. gorenina91 Offline gorenina91
            gorenina91 (Irina) 12 September 2019 12: 08
            - And then it all ends with the fact that when B. Assad leaves (and after all this he won’t last long) and an anti-Russian religious radical comes in his place, then ... now ... now ... now ... now Russia will be declared the enemy of Syria and ... and ... and ... and Russia will finally urgently leave this impoverished territory ... - And the base Hmeimim will become just a monument to the Russian reckless and unrequited love for Syria ...
            - Such things ...
            1. colyanpirogov Offline colyanpirogov
              colyanpirogov (Nikolai Pirogov) 12 September 2019 12: 44
              I will not paint anything, I will only say that you reason like a schoolgirl ... Well, for information, as well as for people like you - Syria has ALREADY paid off for us several times !!! We extract oil there, without taxes and special costs, and sell it every month to the left - how much it costs two, three flights of the "Syrian express" ...
              1. gorenina91 Offline gorenina91
                gorenina91 (Irina) 12 September 2019 12: 45
                -Who let you talk to me like that ??????????
  5. Pishenkov Offline Pishenkov
    Pishenkov (Alexey) 12 September 2019 18: 44
    A good article on a very relevant topic. In my opinion, too optimistic, but ... why not.
    Although the key phrase, from my point of view:

    Beijing enters into a game where politics is closely intertwined with oil and gas flows, pursuing, as usual, one led and understandable goals for him.

    ... so do not really rejoice or relax. The Chinese comrades, as you know, comrades exclusively to themselves ...
  6. gorenina91 Offline gorenina91
    gorenina91 (Irina) 13 September 2019 07: 46
    ... Syria has ALREADY paid off for us several times !!! We extract oil there, without taxes and special costs, and sell it every month to the left - how much it costs two, three flights of the "Syrian express" ...

    What's this??? ISIS spokesman's revelations; or is it a herald from the Kurdish Peshmerga; or did the Turkish associates decide to "share their experience" .. ???
    Imagine Russia, legally exporting a huge amount of hydrocarbons, as ... as ... as ... a sick millionaire-kleptomaniac, secretly carrying small change from the pockets of his own wards .... -Hahah ... -Well, this is beyond all. .. "smoking" ... - Russia has already "profited" ... - all at once "paid for everything" ... -Hahah ...
    - And the prophet himself even found a kind of rotten "valor" in this ...
    - This "valor" is similar to the proud, delusional pathos of a pitiful pickpocket who managed to steal someone's glove, and only one ... - But he still rejoices ... - they say, at least one, but then - slammed ... - Hahah ...
    - Further ... no comment ...
  7. Zlob2k Offline Zlob2k
    Zlob2k (zlob2k) 17 September 2019 15: 15
    The disadvantage of this strategy is that China now has both resources and production and a global market. The same can be said of the United States. Russia is only a resource. Who will lose with such cards is a rhetorical question.