If China and the US cough, so the saying goes, other countries catch the flu. Such is the significance of the economic ripple effect generated by these two behemoths. Trade tariffs and diverging policies toward North Korea are among a growing list of issues that will likely drive discord this year. Energy stakeholders cannot afford to ignore the yo-yo of cooperation and frustration between these two titans.

China is the world’s biggest buyer of oil. It surpassed the US in annual gross crude-oil imports in 2017, with 8.4 million barrels a day compared with the Americans’ 7.9 million. Last December, preliminary data from China’s General Administration of Customs showed that the country’s crude-oil imports rose 15.7 percent year-on-year to a record high of 10.48 million barrels a day in November. The Asian Development Bank expects energy demand to almost double in the Asia and Pacific region by 2030; music to the ears of Middle Eastern energy exporters.

To the west, the boomerang nature of the US energy industry suggests more surprises await in the 2020s. The US has been a net energy importer since 1953 but the continued growth in petroleum and natural-gas production means the country will be a net energy exporter by 2020, according to the US Energy Information Administration. This is an astonishing turnaround, especially considering UN data shows that the country’s population more than doubled from 158 million in 1950 to 324 million in 2017. Take the liquefied natural gas market alone: having become a net natural-gas exporter on an annual basis in 2017, the US could be the world’s largest exporter by the mid 2020s.

When it comes to economic growth, China takes the crown. Beijing will manage the world’s largest gross domestic product by 2050, while the US will slip one spot to third place on the global scoreboard, according to PwC predictions. Yes, China is experiencing its lowest growth rate since 1990 and some, justifiably, anticipate another deceleration post-2020 toward 5 percent annual growth. But perspective is vital; President Donald Trump would be delighted if the US steadily posted annual growth of 5 percent. For now, the International Monetary Fund expects GDP growth in China this year to be 6.2 percent, compared with US growth of 2.5 percent.

Simmering tensions between the two will undoubtedly persist. Beijing tends to act without much political fanfare, while President Trump is more vocal but often has less of a bite. Still, the consensus among Middle Eastern energy stakeholders is that codependence will prevail over strategic mistrust — for now. Making more friends is the Middle East’s best hedging tool. With some strategic quid pro quo, a worst-case scenario could see the region grappling with a cold while isolationists battle the flu.

Make Friends

How can Middle Eastern energy stakeholders plot a safe path through this year’s geopolitical wilderness to remain competitive and ensure energy security? Ignore the isolationists and make more friends. Middle Eastern countries are relatively small; the entire economy of the GCC roughly equates to that of India. While it is important to be friends with the US, it is no longer enough. Alliances with China, India, wider Asia, Europe and the fastest-growing hubs in Africa are also critical. For example, the Middle East must attract investments from China’s One Belt, One Road initiative, as well as India’s Think West policy.

Popular estimates for Chinese investment under OBOR range from $1 trillion to $8 trillion, according to the Center for Strategic and International Studies. In comparison, the Marshall Plan after World War II provided the equivalent of $800 billion in reconstruction funds to Europe. Meanwhile, India’s efforts to integrate itself deeper into geopolitical dimensions, economies and transnational networks are gaining traction. The country’s $2 trillion economy recently overtook France to become the sixth-largest in the world, according to Acuité Ratings and Research. PwC expects India’s GDP growth to overtake that of the US by 2050, securing the number two spot behind China.

Clearly, nurturing friendships in such high places — the world’s fastest-growing economies and biggest energy consumers — can support Middle East coffers while minimizing the bruises caused by the sharp elbows of geopolitics. Saudi Arabia-based Apicorp said the Middle East and North Africa region must invest $260 billion in its power sector alone to meet rising electricity demand between 2018 and 2022. This is just one example of the ways in which friends with deep pockets and a reliance on imports can help the Middle East scale its cliff of energy demand.