Can a “NATO of the seas” ensure the stability of Indian Ocean trade corridors?
The map of a sailor is the opposite of that of a landsman: the continents are white while the coasts and seas are rich in symbols. The same reversal of perspective sheds light on energy geopolitics.
The Indian Ocean, more than the territories that surround it, has been a consistent area of trade and cultural exchange since well before Roman times. Today, long-term trends in the geo-economy and the sharp edge of conflict in Europe demand this holistic view.
The third largest ocean is bounded by critical maritime transit points, clockwise from the Cape of Good Hope, the Mozambique Channel, the Suez Canal and Bab el Mandeb, the Strait of Hormuz, the Strait of Malacca and the Strait of Lombok. Bypass oil and gas pipelines through Myanmar to southeast China have themselves become lifelines.
Just before the pandemic, a third of global oil exports came from the Gulf, and 85% of these were destined for the Middle East, Africa and, above all, Asia. The Gulf accounted for a quarter of liquefied natural gas (LNG) shipments, three-quarters of those exports to the Middle East and Asia.
The Indian Ocean will become more critical. Chinese President Xi Jinping understood this well when he proposed the ocean as the heart of the “Maritime Silk Road” in a 2013 speech to the Indonesian parliament. He then bolted it to Eurasian terrestrial connectivity as part of the Belt-and-Road initiative.
Its growing importance was already underway before this year, due to significant changes on the supply and demand side. The increase in exports is driven by the likely long-term increase in the Middle East’s share of global oil production, plans to significantly increase LNG production in Qatar and the United Arab Emirates, and d major new LNG projects in East Africa (Mozambique and Tanzania) and Western Australia. .
Growing Asian economies are driving energy imports. China has overtaken Japan as the world’s largest buyer of LNG. It is the world’s largest net importer of oil, with India in second place, Japan in third, South Korea in fourth and Singapore in eighth. Bangladesh, Pakistan, Indonesia, the Philippines and Vietnam are also growing LNG customers.
As Europe reduces or eliminates its dependence on Russian hydrocarbons, Middle Eastern countries would shift some of their exports westward, while more Russian oil, LNG and coal would pass through Suez to the US. South and East Asia.
And these will be joined by new energy carriers. The United Arab Emirates, Saudi Arabia, Oman, Western Australia and the Northern Territory have ambitions to be leading players in the emerging global hydrogen business. It will go to Japan, South Korea and via Suez to Europe.
Yet these critical flows traverse a contested region. There are local issues: the Islamic State-inspired insurgency around the LNG plant in northern Mozambique, the ongoing instability in Somalia, the Tigray War in Ethiopia, the economic crisis in Sri Lanka and the coup and its opposition in Myanmar.
There are also international conflicts: the protracted war in Yemen, the tit-for-tat attacks on shipping in the Arabian and Red Seas, and the three-quarters-of-a-century-long confrontation between India and Pakistan. .
And above all, the shadow of China, the geopolitical giant. It has interests in ports around the Indian Ocean, such as Gwadar in Pakistan, which faces Iran’s Chabahar port, Malé in the Maldives, Mombasa in Kenya and its first overseas military base in Djibouti. The commercial viability, the scale of the real investments and the strategic coherence of this “string of pearls” are often exaggerated. But any threat to unhindered maritime access worries India, which is geographically isolated on land.
What should a new security architecture look like? Any large alliance including extra-regional powers would seem to counter someone: not Iran, a threat too paltry on an ocean scale, therefore for or against China.
The Central Treaty Organization in the Middle East and the Southeast Asia Treaty Organization were created in 1955 and were designed as analogues of NATO supported by the Americans and the British, to contain the Soviet expansion. But they foundered in the late 1970s due to the absence of non-aligned India, internal rivalries, the Iranian Revolution and the Vietnam War.
More than a decade ago, geopolitical thinker Robert Kaplan pondered a “NATO of the seas” for the Indian Ocean, comprising Australia, Singapore, South Africa, Pakistan, India and Oman. Today, such a grand project would surely include the United Arab Emirates and Saudi Arabia. Indonesia and, in the future, Bangladesh are other essential states.
But he was well aware of two big problems: containing the rivalry between Islamabad and New Delhi, and maintaining strategic coherence with slow ships over a large and diverse area. Pakistan’s growing alignment with China and Beijing’s own inroads into strategic locations such as Sri Lanka and the Maldives complicate the whole concept as a countermeasure to China. And the United States seems less likely to be an anchor, as GCC states are increasingly concerned about its regional engagement and focus.
In September, the Aukus pact bound Australia, the United Kingdom and the United States, but at the cost of annoying France. Since 2017, the United States has renewed its efforts to bring India together with Australia and Japan in the “Quad”. But despite the Himalayan clashes between India and China, New Delhi has balked at any semblance of an anti-China alliance. China is a key energy customer and investor for the GCC and Iraq, as well as for Iran.
A more constructive system would be inclusive rather than exclusive. To avoid the dangerous great-power competition that is reappearing in Eastern Europe and East Asia, it would still need a mission that is not so comprehensive as to be unclear.
The fight against terrorism, illegal fishing, piracy and natural disasters are commendable but insufficient efforts. Climate and the environment offer broader themes. Order may have to emerge from a series of open associations.
The interruption of free trade across the ocean and its subsidiary straits and gulfs would be disastrous for the world economy and the riparian states. A pragmatic association of the Indian Ocean Treaty could bring an iota of security to this pivotal sea.
Robin M. Mills is Managing Director of Qamar Energy and author of The myth of the oil crisis
Updated: April 25, 2022, 5:30 a.m.