As world leaders gather in Dubai for the COP28 global climate summit from November 30 to December 12, the central focus will be on how to best tackle climate change by transitioning from fossil fuels to renewable and clean energy sources. However, just as important will be the geopolitical dynamics that shape energy flows around the world—from conflicts in global hotspots like Ukraine and Gaza to intensifying competition between great powers like the United States and China. The Gulf states are becoming increasingly pivotal players in each of these areas, making the Gulf region an important bellwether for the evolution of the global climate transition.
The Gulf at the Center of Global Diplomacy
Perhaps the best illustration of the Gulf’s dynamic role in this intersection between energy, geopolitics, and the climate transition can be seen in the ongoing Russia-Ukraine war. Russia’s full-scale invasion of Ukraine in February 2022 not only set off the biggest geopolitical standoff between Moscow and the West since the end of the Cold War, but also reshaped global energy markets. The U.S. and EU passed sanctions against Russia’s energy sector, to which Moscow responded with the familiar tactic of natural gas cutoffs to Europe. This, in turn, drove the EU to diversify its imports away from Russia, which had accounted for 40% of the bloc’s natural gas supply and 25% of its oil supply prior to the war.
One consequence of the war was the acceleration of the EU’s decarbonization drive and shift toward renewable energy. However, Europe still needed to make up for a major shortfall in its fossil fuels imports from Russia in order to meet energy security needs, and the Gulf states have played an important role in this regard. Qatar has significantly increased its exports of liquefied natural gas (LNG) to Europe since the beginning of 2022 and signed long-term supply deals with countries like the Netherlands and France. Likewise, Saudi Arabia, the UAE, and Kuwait have increased their oil exports to the continent. Despite meeting Europe’s new demand, the Gulf countries have also been a source of reprieve for Russia. GCC states have increased purchases of Russian oil on discounted prices (which has, in turn, enabled them to export greater volumes to Europe) and have coordinated hydrocarbon production quotas with Moscow within the OPEC+, at times in rejecting the overtures of the Biden administration.
This commercial fence-sitting reflects the Gulf states’ non-aligned positions on the Russia-Ukraine war and their consistent pursuit of their economic self-interest. Though it may frustrate the West, the Gulf states’ independent foreign policies have enabled them to serve as crucial diplomatic mediators between the belligerent parties. The UAE and Saudi Arabia negotiated at least two sets of prisoner swaps between Russia, Ukraine, and the United States in 2022. Saudi Arabia’s recent Jeddah Summit gathered officials from more than 40 countries to discuss pathways to end the Ukraine conflict, exemplifying the type of active diplomacy the Gulf states have taken to de-escalate global tensions.
Another illustration of the Gulf states’ pivotal role at the nexus of energy and geopolitics is the ongoing Israel-Gaza conflict. While the war has yet to significantly impact global energy flows, the involvement of major energy producers like Iran, as well as the potential for the war to engulf the entire Middle East, could severely impact both energy security and the region’s willingness to facilitate the global climate transition. Israel’s normalization efforts with Arab states, and especially Gulf states like the UAE and Saudi Arabia, has likely factored significantly into Hamas’ decision to launch its October 7 invasion of southern Israel. Indeed, Hamas’ leadership knew that it could disrupt a normalization process that it felt would have undermined the Palestinian cause. A key part of those normalization efforts concerned energy ties, including U.S. assistance to Saudi Arabia on nuclear energy cooperation. Israel’s bombardment of Gaza threatens to derail these normalization efforts and the energy connections that would result from them.
Amid the chaos of the Gaza war, the Gulf states’ growing diplomatic profile has been on full display. Qatar has served as a key mediator in the war, negotiating prisoner exchanges between Israel and Hamas that have freed dozens on both sides. The evolution of this war will have important energy ramifications for the region, both in fossil fuels and the transition to renewables. And as with the Russia-Ukraine conflict, the Gulf states are in a unique position to serve as intermediaries and shape both the resolution and energy implications of the conflict.
Negotiating Between Superpowers
Beyond the ongoing conflicts in Ukraine and Gaza, there is another theater that could serve as the most consequential illustration of the intersection between geopolitics and the climate transition in the coming years: the burgeoning great power competition between the United States and China. The increasingly adversarial relationship between Washington and Beijing holds numerous implications for both energy security and the transition away from fossil fuels.
U.S. competition with China over the political status of Taiwan and territorial disputes in the South China Sea—through which 30% of global oil and 40% of global LNG trade passes—threatens to be a major flashpoint for a conflict that would prove far more disruptive to the global economy than any ongoing conflict. Even if Beijing and Washington do not come to blows, China could seek to manipulate the energy supply chain of Taiwan, which relies on imports to meet 98% of its energy needs. Qatar and Saudi Arabia are important players in Taiwan’s energy security. Like Russia, China has proven more than willing to use energy as a tool of its foreign policy, as with its 2021 shadow ban of Australian coal imports following Canberra’s criticism of Beijing’s COVID policies. China can use its large market not only to restrict supplies from certain “unfriendly” providers, but potentially influence energy exporters with which it has built economic and political ties (such as Russia) to redirect their own supplies away from Taipei in the future.
To make matters worse for the United States and Taiwan, China maintains significant influence over much of the global supply chain for renewable energy. The People’s Republic manufactures 80% of the world’s solar panels and controls a significant portion of the mining and refining processes of critical raw materials that underpin solar and wind energy expansion—from rare earth elements to gallium to silicon. China has also demonstrated a willingness to restrict trade in such materials, implementing export controls of gallium and germanium in August 2023. As tensions between China and the United States intensify over everything from Taiwan to trade and technology, global supply chains could become increasingly threatened, as well as the climate transition.
The precariousness of global climate change efforts highlights the importance of diplomacy in managing such geopolitical tensions and their associated consequences, which brings us back to COP28. Despite their contentious relationship, the pledge by the United States and China to accelerate efforts to combat climate change during a summit between U.S. Presidents Biden and Xi in San Francisco show that there is still room for common ground at COP28. As major players in the energy sector and armed with their growing involvement in diplomatic mediation, the Gulf states are well positioned to shape the global climate transition at COP28 and beyond.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.