John Calabrese on Asia’s Response to the Soleimani Crisis

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John Calabrese on Asia’s Response to the Soleimani Crisis

What are the stakes for Asian powers like China, Japan, India, and South Korea in the latest U.S.-Iran clash?

John Calabrese on Asia’s Response to the Soleimani Crisis

A young Indian Shiite Muslim girl holds a photograph of Iranian Gen. Qassem Soleimani, who was killed in U.S. attack, as she stands on a photograph of U.S. President Donald Trump during a protest near U.S. embassy in New Delhi, India, Jan. 7, 2020.

Credit: AP Photo/Altaf Qadri

On January 3, a U.S. air strike killed Iranian General Qassem Soleimani outside the Baghdad airport. Soleimani, as the leader of the Quds Force within the Iranian Revolutionary Guard Corps, was one of the most powerful people in Iran; he played an outsized role in shaping Tehran’s regional strategy. His death shocked the world, highlighting the potential for simmering U.S.-Iran tensions to break out into actual warfare. Asian powers were among the many countries watching closely to see how their interests might be impacted.

To understand the fallout for Indo-Pacific countries, The Diplomat’s Shannon Tiezzi spoke with John Calabrese, an assistant professor at American University in Washington, D.C. and the director of The Middle East and Asia Project (MAP) at the Middle East Institute. Below, Calabrese outlines the Asian powers’ reaction to and concerns about the latest U.S.-Iran crisis.

To begin, can you tell us about the responses in Asia to the Soleimani killing in particular and climbing U.S.-Iran tensions in general? What were the most common themes?

Soleimani’s killing blindsided U.S. partners and adversaries alike. Responses to the killing and to U.S.-Iran tension in general by Asia’s four major powers – China, Japan, India, and South Korea – have been broadly similar and largely predictable, have sounded familiar themes, and have exposed their limited abilities to foresee much less to forestall further escalation.

Chinese Ministry of Foreign Affairs Spokesperson Geng Shuang condemned the U.S. strike on General Soleimani. Subsequent statements contained standard language declaring China’s opposition to the use of force and exhorting the parties to abide by the U.N. Charter, respect sovereignty, remain calm and restrained, and avoid further escalation. References to U.S. behavior as the “root cause of current tension” were offset by calls for both the U.S. and Iran to uphold peace and stability.

Similarly, the January 3 press release issued by the Indian Ministry of External Affairs (MEA) described recent developments as alarming and called for restraint. A series of tweets by Foreign Minister Subrahmanyam Jaishankar seemed primarily designed to reassure the Indian public and to present the image of the Modi administration as an active and constructive diplomatic actor in direct communication with its counterparts.

During a January 8 press conference, Japanese Foreign Minister Toshimitsu Motegi’s remarks were likewise confined to appeals for restraint and vague pledges to closely monitor the situation and to engage in diplomatic efforts. However later statements urging Iran to “immediately return to its commitment under the JCPOA” [Joint Comprehensive Plan of Action, commonly known as the Iran nuclear deal] revealed Japan’s growing frustration and anxiety.

For Seoul, Soleimeini’s killing and the specter of further escalation occurred against the backdrop of stalled North Korea denuclearization talks and difficult alliance cost-sharing negotiations, and U.S. pressure on South Korea to join the coalition to safeguard the Strait of Hormuz. Thus public remarks by South Korean officials were rather sparse, and narrowly focused on concern for the safety of Korean citizens in Iraq and the wider region.

Many countries in the Indo-Pacific region see Middle Eastern affairs primarily in terms of energy security, worrying that a crisis involving Iran could create an oil shock. How are governments in Asia reacting to that possible danger?

The Indo-Pacific’s four biggest economies – China, Japan, India, and South Korea – are heavily dependent on Middle Eastern oil. This leaves them particularly vulnerable to rising geopolitical tensions. Although the prospect of open conflict in the Gulf appears for the time being to have faded, lingering uncertainty about American and Iranian intentions has left open the possibility of a major disruption to oil supplies from the region.

The current abundance of oil in the market – due to a strong production by non-OPEC producers, coupled with weaker demand growth – has ameliorated the threat posed by such a disruption to Asian customers, at least in the short term. In addition, Japan and South Korea have large strategic petroleum reserves in place in the event of a sudden supply crisis; however, China and India, with lower stocks, have comparatively less built-in resilience.

Although the global oil market has been able to absorb the loss of substantial production from Iran (and Venezuela), Asian refiners have faced higher prices for crude oil and higher insurance premiums for tankers plying the Gulf. These additional costs might well spur inflation, deepen current account deficits, and compound the economic slowdowns that are partly due to the U.S.-China trade war.

In the face of domestic political resistance, both Tokyo and Seoul have (reluctantly) acceded to U.S. pressure to conduct naval patrols in the Strait of Hormuz – Tokyo having decided to dispatch an “independent” unit and Seoul following suit with a commitment to “temporarily expand” its anti-piracy unit to the Persian Gulf and Gulf of Oman. Yet it is far from clear whether these deployments can accomplish much in the way of safeguarding Japanese and Korean energy interests, or are even expected to.

China has invested heavily in renewable energy. Japan is also boosting the proportion of renewable energy in its supply mix to buffer itself against external oil-supply shocks. Elsewhere in Asia, including in India and South Korea, similar efforts are underway. However, there are no easy or quick solutions to Asian countries’ dependence on fossil fuels and heavy reliance on energy supplies from the Gulf.

Adding to the uncertainty, massive construction and shipping deals have taken a hit – because the sanctions waiver was not renewed, Korean construction firms have had to pull out of at least $2.5 billion in planned projects.

Iran’s Chabahar port is an important part of the regional strategies for both India and Afghanistan. What impact will worsening U.S.-Iran tensions have on the future development of the Chabahar project?

India’s rapidly developing economy is thirsty for energy and markets for export. India and Iran have been developing a strategic partnership that is broadly part of India’s plans for what it calls its “extended neighborhood.” The Chabahar Port project fits within that framework. A fully developed Chabahar would also assist India in bypassing Pakistan to connect with Afghanistan and counter growing Chinese influence in the Arabian Sea. The escalation of tension between the U.S. and Iran raised concerns that Indian plans to develop the port would once again suffer delays.

The Chabahar Port’s joint development was agreed on in 2003, but was repeatedly halted as a result of international sanctions against Iran. In May 2016, India and Iran signed a deal to equip and operate the container and multipurpose terminals at Shahid Beheshti (Chabahar Port Phase-I). Although the first phase of the port’s commercial operations began a little over one year ago, the U.S. withdrawal in 2018 from the Iranian nuclear deal and unilateral reinstatement of sanctions have had a chilling effect on the port’s development. Even though the Trump administration exempted Chabahar from sanctions, companies otherwise interested in the project remained apprehensive about collaborating with Iranian institutions. As a result, India was unable to purchase equipment for the project and cut its budget by more than two-thirds for the current fiscal year compared with the previous one.

However, at the second Two-Plus-Two Ministerial Dialogue in December in Washington, U.S. Secretary of State Mike Pompeo and Defense Secretary Mark Esper reportedly presented their Indian counterparts with a written assurance to keep Chabahar off the sanctions list. This apparent breakthrough could not have come at a more propitious time, as Pakistan’s Gwadar Port has begun handling transit cargo to and from Afghanistan.

China has friendly ties with Iran but has also tried to avoid jeopardizing its U.S. relationship for Tehran’s sake. For example, Chinese companies have cut back on oil imports from Iran to comply with U.S. sanctions. Amid the spike in U.S.-Iran tensions, what’s at stake for China – and are there possible benefits to be had?

China-Iran trade plummeted by one-third in 2019 – bad news for China, but worse news for Iran. Although the prospect of a full-blown military confrontation between the U.S. and Iran has receded, the American “maximum pressure” campaign against Iran remains in full swing. The new round of U.S. sanctions against foreign firms includes Chinese companies.

At the same time, U.S.-Iran tension could provide China with potential strategic gains. The joint naval exercises conducted by China, Russia, and Iran in the Indian Ocean and Gulf of Oman in late December indicate a convergence of interests. However, the notion that China is bent on replacing the United States in the Middle East, supporting Iran’s revisionist regional foreign policy at the risk of alienating its Gulf Arab partners and/or directly opposing the U.S. is implausible.

Many analysts have discussed how the Soleimani killing and Iran’s retaliation threaten to deflect U.S. attention from the Indo-Pacific region. Will there be a similar impact on Iran’s diplomatic efforts in Asia? In other words, is Iran going to have to scale back its efforts in the Indo-Pacific to focus on affairs closer to home?

To date, the Iranian authorities have proved willing to employ force to quell domestic protests and thereby have contained them. Next door in Iraq, the extent of Iranian influence is being seriously challenged. However, there, too, Iran has used its leverage to advantage. Anti-Iraniain protests have given way to massive demonstrations calling for the withdrawal of American troops. Iran’s preoccupation with these immediate domestic challenges is likely to delay or disrupt its efforts to strengthen relations with Asian countries.

Meanwhile, Iran’s recent breaches of the 2015 nuclear deal are bound to complicate relations with those Asian countries which are its leading partners, especially Japan and South Korea but possibly India and even China as well.