13 May 2007 - 09:12
  • News Code: 104455

Japanese Prime Minister Shinzo Abe’s visit to the Middle East last week was just the beginning of much closer energy ties between Japan and Persian Gulf countries, a relationship that will not only guarantee demand for Persian Gulf oil, but also stronger ties to all aspects of the world economy for those Persian Gulf nations.

“For the Persian Gulf states, they want to jump on the globalization train, they want to diversify, and they want to have better political relations with Japan. So it is on this anvil of mutual interests that these burgeoning ties will grow,“ said Steve Yetiv, a professor at Old Dominion University and an expert on the Persian Gulf and global energy security.

Japan imports more than 5 million barrels of oil per day, making it the second-largest importer after the United States, and the world’s third-largest consumer. And the Middle East is by far the most important supplier of Japan’s oil. In 2005, more than 4 million barrels, about 80 percent, came from the Middle East every day.

So it comes as no surprise that Abe would spend several days in talks across the region, stopping in Saudi Arabia, Kuwait, the United Arab Emirates and Qatar, and come away with energy-related agreements in several of them.

It also comes as no surprise that Persian Gulf countries were eager to meet with the Japanese premier. Not only does Japan promise a large and sustained market for Middle East oil, but there is the possibility for Japan to help Persian Gulf countries with advice and expertise on more than just the energy facets of their economies, in addition to technical support for the development of nuclear energy.

The discussions between Japan and the Persian Gulf countries during Abe’s trip were small, but covered a wide range of concerns.

In Saudi Arabia, Japan offered to advise the country on trade and investment, and Saudi Arabia agreed to consider using Japanese storage tanks and allowing Japan to use the oil in emergencies. In Qatar, Japan offered loans for a power-generation project. And in Abu Dhabi, one of the United Arab Emirates, Japan may offer several billion dollars in low-interest loans for energy infrastructure.

While the agreements on Abe’s trip were slight, they represent a beginning of broader ties between Japan and the Persian Gulf.

“These are modest steps on the road to a policy which will bring Japan closer to the Persian Gulf Cooperation Council countries and other countries, and bring those countries closer to Japan,“ Yetiv said.

In part, this closeness will help guarantee markets for Persian Gulf petroleum products, something that is always a concern for the oil-dependent economies.

“Their short-term consideration is that their budgets are based very much on the revenues they get from oil, and that makes them vulnerable,“ Yetiv said.

More broadly, Japan offers a door to the rest of the economic world.

“It is not just that Japan is a big economy and can help them develop their non-oil products for trade, but it is also that Japan is integrated into the global economy. So Japan can be a form of a conveyer belt for them onto the global economy,“ Yetiv said.

“The world is talking about moving beyond petroleum; that is not going to happen for a long time, but it is in the air. And the Persian Gulf states are also aware of that reality,“ he said.

Increasing ties with Japan could have a political upside as well.

“It can also help them in global economic institutions. In addition, Japan can have very close ties to the United States, so if they have good ties with Japan they have another avenue of influence in the United States, where their influence has probably gone down since Sept. 11,“ Yetiv said.

 

PIN/ UPI.COM

News Code 104455

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