China, Russia, and Iran Forge New Oil Agreements to Create New Energy Market Order
Jose Nino
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In the first week of June, China, Iran, Iraq, and Russia hammered out a series of agreements in the ambits of energy, logistics, and security.
Financial journalist Simon Watkins detailed some of the implications of these new agreements.
From a big picture standpoint, China is using its multi-decade “One Belt, One Road” economic project to turn the Middle East, as Watkins noted, “into a large oil and gas station by which it can fuel its economic growth to overtake the U.S. as the number one superpower by 2030.”
The three principal oil and gas reserves in the region are Iran, Iraq, and Saudi Arabia, which China has a strong desire of controlling in some shape or form. For its part, Russia wants to exert more influence in the Middle East so that religious instability doesn’t spill into its traditional sphere of influence. Naturally, Middle Eastern countries will be able to forge better ties with Eurasian giants like China and Russia due to the mutually authoritarian style of governance these countries share.
Iran already exerts considerable influence over Iraq through its proxy militias and broader economic ties with the country in the energy realm.The recent set of cooperation agreements has only bolstered the ties between Iran-Iraq even further.
With regards to Russia, Iran signed 10 new cooperation agreements with Iran in the oil sector on May 18. Per a source with intimate ties to Iran’s Petroleum Ministry who was in touch with OilPrice.com, the agreements were made up of six memorandums of understanding, two contracts, one roadmap for military cooperation, and an additional roadmap connected to bilateral cooperation in the fields of industry, technological transfers, and oil recovery enhancement.
In sum, these agreements bolster previous agreements that Iran and Russia have hammered out. On top of that, the agreements facilitate the exchange of the most promising military leaders between the two countries and for Russia to gain complete access to Iran’s airports and seaports. This agreement allows for the two countries to continue cooperating in other military and security areas, which includes intelligence, equipment and technology sharing.
Alexander Novak, the Russian Deputy Prime Minister and co-chair of the Permanent Russian-Iranian Commission on Trade and Economic Cooperation highlighted that the two countries are working on facilitating banking activities and using their national currencies in bilateral transactions. Additional progress was also realized on the North-South Transport Corridor (NSTC), with multiple agreements hammered out in the air transport, maritime, rail, and road sectors. Russia has an interest in constructing the corridor all the way to India and beyond. In addition to increasing trade between Russia and Iran through the Caspian and Persian Gulf regions, these routes would also allow for the two Eurasian actors to use them for “dual purpose” functions that have civilian and military dimensions.
All in all, the East is beginning to consolidate into a competing axis to challenge the Collective West. The unipolar moment is over and the new multipolar order is upon us. Will our leaders adjust to this new reality? If recent history has taught us anything, the neoliberal/neoconservative fanatics will continue to bury their heads in the sand.
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