Things often change overnight and what used to be right becomes wrong. Until last week, oil producers feared cheap oil. Now, world crude oil prices are violently fluctuating after Saturday’s drone attacks, which set ablaze two major oil installations in Saudi Arabia.
Yes, this is the Middle East that I have known for the past 41 years.
Usually reticent petroleum experts suddenly spoke out. Some said the attacks would only cause short-term disruption, predicting no serious impact on energy markets and the world economy. Others, on the contrary, stated that the drone strikes against the Abqaiq and Kurais facilities would be a recipe for $100 per barrel oil.
The situation, however, does not warrant such pessimism. Saudi Arabia and the Western nations have 30 to 60 days of strategic oil reserves — more than enough to prevent a short-term disruption in the market. Crude oil prices may rise for a while but will eventually stabilize. This, fortunately, was not my most serious nightmare regarding the Persian Gulf, for the following reasons:
First, who did it. Yemen’s Houthi rebels claimed responsibility, but nobody in Tokyo believes that. Washington first blamed the Islamic Republic of Iran for being behind the attacks. Everybody in Tokyo knew, however, that Tehran would never admit it, as was the case when a Japanese tanker was attacked near the Strait of Hormuz on June 13.
Second, no matter who launched the drone attacks, the perpetrators seem to have mainly attempted to make economic and political gains. Even if the Revolutionary Guard units had done it, it would have been to prevent the Iranian leader from meeting with the U.S. president later this month in New York, not to topple the House of Saud.
Finally, and most importantly, what’s most worrying in the Persian Gulf region is not only the disruption of oil imports from there to Japan but also the future of the Arab monarchies on the peninsula. Who knows when rebels will start aiming to topple them? That is much scarier than a temporary disruption of oil supplies and prices.
Two days before the drone attacks I was in Tokyo participating in a two-day Japan-U.S.-Europe strategic dialogue. The event was organized by the German Marshall Fund of the United States and the Tokyo Foundation for Policy Research and supported by the European Union Delegation to Tokyo. This year’s forum was particularly thought-provoking. Trilateral relations have changed in the right direction for the past several years.
What was profoundly surprising were the remarks by a high-ranking U.S. official on East Asia, who stated that Japan is key for U.S. foreign policy for this region and is indispensable in protecting the open and rules-based Indo-Pacific region from revisionist status-quo changers.
Under the so-called Chatham House rule adopted for this event, none of the speakers at the forum can be named. What the high-ranking official said, however, is something I had been wishing to hear from U.S. government officials for more than a decade. Since before I left the Japanese foreign service in 2005, American officials had never precluded a possibility of improving relations with Beijing by trying to engage China in the international community while deterring its military ambitions overseas.
Europe is changing as well. Until a few years ago, European strategic thinkers seemed to value economic relations with Beijing without paying enough attention to potential threats from China. They needed to be reminded that while Europe faces only one threat — from Russia — Japan has both Russia and China in its neighborhood.
In a session on the second day, we discussed the risk of an economic decoupling with China. While economic globalization is inevitable, decoupling with the Chinese economy may not necessarily be so. Yet no matter how we push, Beijing may not change its policy and adopt economic and trade policies based on international rules.
By the end of the two-day discussions, it was clear that there were still significant differences between the European position vis-a-vis China and that of Japan and the United States. Europe is becoming more inward-looking and the European attitude toward Beijing is nuanced at best.
This is perfectly understandable, and they don’t need to be blamed for taking such a position. What is more important is to contemplate how to enhance this important trilateral policy coordination among Japan, the European Union and the U.S. It is even more important after last weekend’s drone strikes.
If there was anything missing at the forum, it was a discussion on the volatile situation in the Middle East. Unfortunately, the forum was held just before the drone strikes and no Middle East experts were taking part in it. Intellectual compartmentalization is always a structural impediment for global and strategic dialogues.
The Middle East and East Asia are becoming one theater of operation, which could be dubbed “Middle-East-Asia.” Similarly, Europe and the Middle East have been a single theater for millennia. Those three sub-theaters must be viewed as a common theater of operations for Japan, Europe and the U.S.
Nevertheless, Europe looks divided and obsessed with internal rivalries, while the U.S. is drifting under the administration of President Donald Trump. However, that is the reason why Japan must take an initiative to promote truly global trilateral coordination and especially to encourage European engagement in East Asian affairs.
Kuni Miyake is president of the Foreign Policy Institute and research director at Canon Institute for Global Studies.