May 02, 2006

Will Hutton:

Oil is transforming world politics. Iran can afford to face down the wrath of the West and be robust about becoming a nuclear power because it has the cast-iron support of China - secured by oil.

In November 2004, Iran gave China the rights to exploit the giant Yadavaran field. Importantly, China plans to bring this oil into China, not across the Indian Ocean and through the Malacca Straits, but by pipeline across central Asia, free from the surveillance of the US fleet. China's attitude to Iran is foretold; it has refused to condemn Sudan over the killings in Darfur since Sudan allowed it to build a 500-mile pipeline to the coast. Ahmadinejad can therefore be 100 per cent certain that China will veto any attempt to win UN approval for military intervention in Iran.

China feels acutely vulnerable over oil. It has no strategic oil reserves and deputy chief of the Chinese General Staff, General Xiong Guangkai, has called for a build-up of both reserves and military capacity and for a fleet to defend its oil tankers. Iran is part of this equation. So is winning control of oil and gas reserves in the East China Sea, where the key is the disputed sovereignty of the uninhabited Senkaku Islands.


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