China, America, And India Compete Over Gulf Energy

President Donald J. Trump will set off on a trip to the Middle East to try to do what Biden could not: corral Saudi Arabia and the region’s other rulers into aligning with his vision of global energy dominated by fossil fuels. Trump is already promising a “very, very big announcement” shortly after it was revealed that he would be meeting with leaders. While the future of the Iranian nuclear program and expanding the Abraham Accords dominate the agenda, there is an overriding strategic imperative behind Trump’s visit. The United States is worried about China becoming a hegemon in the Persian Gulf via its energy imports, trade, and investment, and simultaneously seeks to prevent China from becoming Iran’s geo-strategic patron to the detriment of US interests and allies.

For over a decade, China has surpassed the United States as the largest consumer of Arab Gulf energy. Today, with Beijing involved, Middle Eastern states like Kuwait, Saudi Arabia, Bahrain, and Qatar no longer rely solely on the American demand for oil to maintain their national budgets. This shift was seen as inevitable due to China’s vast population undergoing urbanization and economic development. The trend coincides with the rise in domestic energy production in the United States, which not only reduces foreign energy imports but also positions the US as the largest LNG exporter in the world and a net energy exporter. To prevent China from acquiring a range of strategic energy assets in the Gulf, Washington has turned to another crucial nearby energy-hungry nation: India.

Enter India

As a follow-up to the Abraham Accords initiative, which normalized relations between Israel and four Arab states, the United States administration pushed for the I2U2 agreement among Israel, India, the United States, and the United Arab Emirates. The rationale for this agreement — made possible by the normalization of relations between the UAE and Israel — was that India’s demand for energy could serve as a conduit for American interests in the region. India’s aggregate demand and the UAE’s energy would supplement Israeli technology and American armaments. Collectively, this would also create a more secure transportation corridor from India via the UAE and Israel to Europe, counter-balancing the Chinese “string of pearls” strategy.

For India and the US, this was a win-win agreement. For America, having another power skeptical of China heavily involved in the region would prevent Beijing from politically leveraging its economic clout. Increased Indian ties with the Middle East would also offset India’s dependence on Russian energy, furthering Western interests. India, for its part, gains deeper access to affordable energy, vital for its economic development; a platform on which it can flex its political muscles as an emerging power, and a politically advantageous indirect security relationship with the United States, enabling India to import more modern military equipment and reduce its dependence on the Russian defense industrial base.

China’s Response

The revelation that China is assisting the Houthis, a Yemeni terrorist group that has been stymying the movement of goods throughout the Red Sea, has been interpreted in various ways. Some view it as a sign of weakness following allegations that it was blackmail in exchange for Chinese ships traversing unmolested. Others regard it as an insidious indication of Beijing’s global reach. However, both interpretations overlook a crucial aspect: China increasingly relies on Middle Eastern energy and is expanding its presence in the region, particularly around choke points such as Bab el-Mandeb via Djibouti and Yemen, and the Suez Canal. Beijing is positioning itself to act against American interests, including controlling transportation routes. Chinese involvement in the region is becoming less of a choice and more of an obligation, compelling Beijing to assume America’s former role.

China did not ignore the formation of the I2U2 bloc in Middle Eastern geoeconomics. While directly countering or breaking up the bloc would prove futile, China turned to exploiting regional rivalries to secure its energy supplies. The diplomatic coup that was China brokering the normalization of relations between Saudi Arabia and Iran allowed Beijing something the United States hasn’t had since 1979 – simultaneous access to both of the region’s largest economies.

Qatar’s Central Role

China has also sought to make inroads with another traditional American partner in the Gulf, Qatar. It sees in Qatar’s rivalry with the UAE and its avoidance of the I2U2 agreement potential wedge issues to be exploited.

Qatar has historically been supportive of d the United States in many ways. When the US faced gas shortages, it was Qatar that filled the void, even assisting in the construction of the Golden Pass LNG terminal in Texas. When the Shale Revolution transformed the energy landscape in the early 2010s, Qatar collaborated with the US to convert that terminal into an export facility as part of broader Qatari-American cooperation. This is reasonable considering the over $600 billion worth of American investment in the country, global energy collaboration between QatarEnergy and numerous American companies, and a mutual suspicion towards the Iranian neo-imperial agenda.

America’s pursuit of energy dominance in LNG would benefit from Qatar’s established leadership in this sector. For example, amid new tariffs, the US faces a new shortfall of one hundred billion dollars in petrochemicals necessary for domestic production. The US-Qatar Golden Triangle petrochemical plant is set to open in 2027 and be the world’s largest integrated polymer facility. It alone could make up the shortfall on its own, while providing more for export, and creating tens of thousands of jobs in Texas. This plant would also make the US the largest polyethylene producer in the world, surpassing China.

China recognizes this potential and is trying to woo Qatar to stop American polymer developments and wreck the I2U2 framework. Trading nations such as Qatar can ill afford to ignore China’s Belt and Road Initiative . After searching for American partners during the Biden administration, when LNG infrastructure deals were frozen due to its green agenda, Qatar signed a 27-year supply agreement with Sinopec, China’s state-run energy company. In instance after instance, Qatar’s historical engagement with the United States was met in Washington with apathy, resulting in Chinese gains.

Qatar is at the center of the Middle East’s diplomatic quadrille. The US, China, India, the UAE, Saudi Arabia, and Iran all jockey for influence in this valuable, energy-rich state. Like so many relationships, neglect, more so than Machiavellian planning, has created a rift between the partners, allowing others to take advantage.

President Trump’s decision to include Qatar and the UAE in his first overseas itinerary is a strong indicator that he is serious about preserving the I2U2 agreement and managing competition with China. He clearly has not been put off by the claims of some in Washington that Qatar supports Hamas or funding radical organizations in the U.S. Rather, he correctly appreciates the utility that Qatar enjoys in the energy and economic spaces, and seeks to integrate Doha into American regional policy along with Riyadh, Abu Dhabi, and Jerusalem, to promote security, stability, and prosperity in the Middle East.