The Sino-Russian Hydrocarbon Axis Grows Up

Russia and China have just concluded a $400 billion gas agreement. Washington should take notice.

Eight years ago, in the pages of The National Interest, Flynt Leverett and Pierre Noël identified a “new axis of oil”—a “shifting coalition of both energy exporting and energy importing states centered in ongoing Sino-Russian collaboration”—that was emerging as an increasingly important counterweight to the United States on a widening range of international issues.  While, at the time, Russian oil and gas exports to China were negligible, Leverett and Noël projected that Russian hydrocarbons would become “a major factor buttressing closer Sino-Russian strategic collaboration” in the future.    

Western analysts have long been skeptical of the prospects for sustained Sino-Russian cooperation—but over the last eight years, the new axis of oil has become undeniable market and geopolitical reality.  Russia is now one of China’s top three oil suppliers (with Saudi Arabia and Angola) and is set to grow its oil exports to China significantly in coming years.  While some analysts cite Chinese firms’ acquisition of upstream positions in Kazakhstan and Turkmenistan and the opening of a Turkmen-Chinese gas pipeline as signs of Sino-Russian competition in Central Asia, these moves supported Moscow’s interest in keeping Central Asian hydrocarbons from flowing west and undermining Russia’s market dominance in Europe.  And this week—just hours after Foreign Policy headlined “the deal that wasn’t”—Russia and China concluded a $400 billion gas agreement, marking a major step in the maturation of the (let’s now call it) Sino-Russian “hydrocarbon axis.”

Geopolitically, too, this axis has assumed ever greater importance.  Moscow has been profoundly disappointed with what many Russian political elites see as the Obama administration’s fundamentally disingenuous “reset” of U.S. relations with Russia.  Beijing, for its part, has been alienated by a series of U.S. military and political initiatives that, in the eyes of Chinese elites, are meant to contain China’s rise as a legitimately influential player in Asian affairs.  In this context, the deepening of Sino-Russian energy ties has indeed buttressed closer cooperation against what both Moscow and Beijing view as a declining, yet dangerously flailing and over-reactive American hegemon.     

One observes this clearly in the Middle East.  After the Arab Awakening began in late 2010, the Obama administration’s ambition to co-opt it as a tool for remaking the regional balance in ways that would revive America’s regional dominance prompted more determined (and coordinated) Russian and Chinese resistance to U.S. policies than the world has witnessed since the Cold War’s end.  In March 2011, Russia and China abstained on a UN Security Council resolution authorizing the use of force to protect civilians in Libya.  Washington and its partners quickly distorted this resolution to turn civilian protection into a campaign of coercive regime change in Libya—with predictably and, by now, glaringly evident destructive consequences.  Within weeks, Russian and Chinese officials were openly acknowledging their acquiescence to the Libya resolution as a “mistake”—one they would not repeat in Syria.  Since then, Moscow and Beijing have vetoed three U.S.-backed resolutions seeking Security Council legitimation for intervention in Syria—and will veto more, if need be, until Washington accepts reality and supports a negotiated settlement between parts of the Syrian opposition and a Syrian government still headed by President Bashar al-Assad.   

Likewise, over the last four years, Russia and China have refused to support Security Council authorization of further multilateral sanctions against Iran, and have become ever more resentful of what they consider Washington’s illegal and unilaterally imposed secondary sanctions regime.  Their opposition to new multilateral sanctions intersected with increasing incentives for them to defy existing U.S. sanctions to push Washington’s sanctions policy to the limit.  This reality—combined with President Obama’s inability to act on his declared intention to attack Syria after chemical weapons were used there in August 2013, which made clear that Washington can no longer credibly threaten the effective use of force in the region—has compelled the Obama administration to take a more serious approach to nuclear diplomacy with Tehran.  If, in the end, the United States proves unwilling to conclude a final nuclear deal with Iran, Russia and China are likely to become far less accommodating of U.S. demands for compliance with Washington’s illegitimate secondary sanctions.  Moscow, for example, could conclude a $20 billion deal it is currently negotiating with Iran, whereby Iran would swap oil volumes for Russian industrial goods and equipment.