After Billions in Chinese Investment Oman's Duqm Port Could Help Bypass Hormuz
Located between the Gulfs of
Oman and Aden, Oman’s Duqm port has special importance as it lies along the
Strait of Hormuz, Gulf of Oman, Indian Ocean and the Arabian Sea.
With this strategic location,
it is not only close to South Asian countries like India and Pakistan, it is
also easily accessible from East Africa. Since joining the Belt and Road
Initiative (BRI) in 2018, Oman has acquired additional importance as it has
emerged as China’s first base-station in the Gulf.
Securing dependable and secure
energy resources has always been a top priority for Beijing and there is no
better place for attaining these goals than the Middle East which holds 48% of
oil reserves and 40 % of gas reserves globally. Therefore, a $10.7 bn Sino-Oman
industrial city and the Duqm Special Economic Zone (SEZAD) are being developed.
Once ready, this will be the biggest SEZ of the MENA region.
As the first phase of
construction approaches completion in 2020,
Duqm will have the capacity to link several continents with the
logistics and infrastructure built with Chinese investment. As China’s main
energy corridors, these Middle Eastern routes are the “oil roads” of the BRI,
according to Lu Ruquan, Director of the Strategic Development Department of the
China National Petroleum Corporation (CNPC).
Notably, Oman will be the
first energy producing country which is also a central BRI node in the Gulf
with well-located ports. For successful business ventures, peace is the first
requirement and Muscat has managed to have good ties in the region as well as
with Iran, India, China and the U.S. simultaneously. Balancing its relations,
Oman has encouraged foreign investment from all and the rivalry between various
powers makes no difference.
Another interesting aspect
about Duqm port is that it can be an alternate route outside the Straits of
Hormuz with direct access to the Arabian Sea. Considering that the Strait is
quite unstable due to U.S.-Iran frictions these days, it seems likely that more
attention will be given to Duqm in the days ahead. Recent attacks on oil
vessels near the Strait of Hormuz might even force shipping companies to
consider Duqm instead as a safer route. Located in Oman’s East, it is far away
from the scene of the conflict these days.
Indirectly, the U.S.-Iran
conflict could even promote Oman and most of all, Duqm port, owing to its
crucial location. Being a stable, neutral state with no terrorism or war
threats even though it is situated in a potentially volatile region, Oman could
benefit from the ongoing tussle in the region. Having a strategic port deal
with Oman, even Washington can have better access to the Gulf and an alternate
route for its ships if the need arises.
Bypassing the Strait of Hormuz
is an important military option right now as tensions with Iran show no signs
of abating. According to a statement from the U.S. embassy in Oman, the
bilateral agreement provides access to facilities and ports in Duqm and Salalah
and “reaffirms the commitment of both countries to promoting mutual security
goals.” Being a big port, Duqm can even turn around an aircraft carrier
according to U.S. officials.
Considering the current
geopolitical scenario, the time has come for Oman to reap the benefits of its
strategic location as well as its neutral foreign policy. Even though Duqm and
other Omani ports are right at the center of a global competition for
influence, Muscat’s stance continues to be neutral and it does not seem
perturbed.
Also having an agreement with
New Delhi for logistics support and long-term anti-piracy operations, Oman
provides maintenance facilities for Indian ships at Duqm, the only port in the
area with repair facilities for large vessels. Only last month, joint exercises
were held with the Japanese navy and the port remains a supply and refueling
base for the British, Japanese and American navies.
In tandem, the Beijing-Muscat
alliance is on its peak and this is what makes Duqm an interesting case.
Instead of exclusively giving space to one country, it gives space to other
nations as well and this may be the secret of its success. There are some
drawbacks and just like with Gwadar, another BRI port in Pakistan, observers
wonder whether China could use Duqm for military purposes.
According to the ‘string of
pearls’ sea-lane strategy, China requires several ports in Pakistan, Myanmar,
Sri Lanka and Bangladesh to achieve dominance. However, China invested to
upgrade its energy security and build a large trade network to stem its slowing
economic growth.
For now, the BRI has helped
diversify Arab economies and boosted energy activities in the region. Nowadays,
China is negotiating a Free Trade Agreement (FTA) with the Gulf Cooperation
Council (GCC) Once this is finalized, most uncertainties surrounding the BRI
would be done away with.
