Saudi Arabia’s King Salman leaves with Malaysian Prime Minister Najib Razak after a Memorandum of Understanding signing ceremony in Putrajaya, Malaysia, in February. (Edgar Su/Reuters)

King Salman of Saudi Arabia recently wrapped up a four-week, five-country visit to Asia that highlighted the rapidly growing density and complexity of ties between the Gulf Cooperation Council (GCC) and Asian states. Largely under the radar, these growing ties between the Gulf and Asia have the potential to reshape geopolitical patterns and relationships.

The Gulf States emerged after 2011 as the center of gravity within both a Middle East in transition and an international economy still recovering from the global financial crisis. The developed and emerging Asian economies that are leading the rebalancing of geoeconomic power across the world have a particularly keen interest in the issues of energy dependence and security of access to resources. Those interests might be expected to lead to new strategic policies — but thus far have not yet materialized into a serious challenge to the U.S.-led regional order.

The Middle East’s shift toward Asia

The United States steadily reduced its reliance on Middle East energy over the past decade and a half, but Asia grew more dependent on imported energy in the same period. High rates of population growth, urbanization and industrialization have ensured that domestic demand for energy in Southeast Asian states doubled between 1990 and 2007 — and is projected to be three times its 2007 level by 2030, with much of that increase set to come from GCC states.

China and India have joined Japan and South Korea as voracious consumers of Gulf oil and gas that now goes east in far larger quantities than west. According to the French think tank IFRI, Gulf States’ exports to Japan, South Korea, China and India are more than three times larger than to the United States and the European Union, and the figure is set to grow over the remainder of this decade.

The shift goes beyond oil and gas

Oil and gas ties have, over the past decade, moved far beyond simple transactions between buyers and sellers of energy to encompass developments across the upstream and downstream sectors. The Abu Dhabi government-owned Mubadala Development Co. has been particularly active in the upstream sector across Southeast Asia through a joint venture in gas exploration with the Malaysian National Petroleum Company (Petronas) in Malaysia as well as participation in oil field development in Vietnam, Thailand and Indonesia.

In 2013, the UAE signed a $6.75 billion agreement to establish a petroleum storage facility with a capacity of 60 million barrels of crude oil in the Malaysian state of Johor and has an additional oil storage agreement that places up to 6 million barrels of Abu Dhabi crude oil in Korea’s Strategic Petroleum Reserve. Abu Dhabi has also awarded significant slices of its 40-year onshore oil field concession to East Asian partners, with Chinese, Japanese and Korean firms prominently represented in the new array of stakeholders finalized in 2017.

Qatar, by contrast, has invested heavily in downstream projects in Southeast Asian states, including a $5 billion investment by Qatar Holding in the Pengerang Integrated Petroleum Complex also located in Johor state in Malaysia. Signed in 2013, the project is designed to enable Malaysia to compete with Singapore to become a regional petrochemicals hub for Southeast Asia.

In February this year, Saudi Aramco also invested $7 billion in the Petronas refining and petrochemical complex in Malaysia. Announced during King Salman’s visit to Malaysia, the investment represented Aramco’s largest ever downstream investment outside Saudi Arabia. The Kuwait Petroleum Corporation also moved into the Southeast Asian energy sector with a $9 billion joint refinery project in Vietnam and a partnership with Indonesia’s Pertamina Limited to develop a refinery complex in East Java.

The food-scarce GCC states

The GCC overwhelmingly remains reliant upon imported food, and sees growing interests in trade with the highly populated but energy-poor food-exporting nations in Southeast Asia. GCC officials felt mounting alarm at the potential for any escalation of commodity prices — as in 2007 and 2008 — to cause social and economic anger.

Rising food prices triggered riots among migrant laborers in the UAE and Bahrain in 2008 and highlighted how reliance on imported food stocks left GCC states exposed to volatility in pricing and potential disruption in supply. At the first ministerial meeting of GCC and ASEAN states in Bahrain in 2009, ASEAN Secretary-General Suring Pitsuan pointedly said, “You have what we don’t have, and we have in plenty what you don’t have, so we need each other.” Qatar has since been particularly active in forging closer trade and agricultural links with India, Indonesia, Thailand, Vietnam and the Philippines.

GCC-Asia infrastructural developments

Five of the six GCC states (excepting Bahrain) applied to become founding members of the Asian Infrastructure Investment Bank in 2015 — despite U.S. opposition to the China-proposed initiative. Indian and Chinese conglomerates are involved in major infrastructure projects, such as the Haramain High Speed Rail link connecting the holy cities of Mecca and Medina in Saudi Arabia, while Indian conglomerate Larsen & Toubro is involved in the construction of two of the multibillion-dollar Riyadh Metro lines.

Indian officials also are keenly interested in establishing a formal presence at Oman’s new port and special economic zone at Duqm as part of a strategy to support Indian economic and security interests in West Asia. In the other direction, Saudi officials have identified Japan as a major strategic and technological partner in underpinning the ambitious Vision 2030 effort to accelerate economic diversification in the Kingdom.

Inter-regional security

The impact of these growing ties remains limited on the security front, for now. Inter-regional security dialogues have focused largely on individual areas of mutual interest rather than a comprehensive strategic picture. GCC and Asian navies have worked together in anti-piracy operations around the Horn of Africa, and the UAE has participated actively in the Indian Ocean Naval Symposium established in 2008 to expand maritime security cooperation. Other areas of cooperation include joint counter-radicalization initiatives and measures to combat international terrorist groups, such as the Islamic State.

While these initiatives add a new and multilateral layer to security relations, there is at this point no imminent prospect of such ties displacing the regional security architecture that has been based on U.S. power projection in the Gulf since the 1980s.

Kristian Coates Ulrichsen is a fellow for the Middle East at Rice University’s Baker Institute for Public Policy.