Energy dominance and Chinese interdependence

The notion of Energy Dominance, which emerged as a central theme of recent United States strategic thinking in 2017, was often misunderstood as a unilateral project designed to render the Republic economically autonomous and therefore geopolitically unencumbered. In practice the policy has had an opposite effect. By transforming the United States into a colossal exporter of hydrocarbons, particularly liquefied natural gas, refined petroleum products and petrochemical inputs, Energy Dominance has granted the United States significant influence in prices in global hydrocarbon markets, and thereby deepened global interdependence rather than diluted it. Nowhere is this more evident than in the economic relationship between the United States and the People’s Republic of China. The United States sets the supply-side price of hydrocarbons; China, as the world's biggest consumer, sets the demand side price. The net result is that hydrocarbon prices hover within a short range (sometimes called a "collar and cap") set in coordination and competition by the world's two biggest economies.

Hence despite political rhetoric that paints the two as adversaries destined for collision, the logic of their respective energy and industrial systems creates a durable tether that binds both states into a cycle of competitive coexistence. The consequence is not the elimination of strategic rivalry, but a structural environment in which the risk of deliberate conflict approaches zero because the economic cost to each would be intolerable.

The United States, by the end of the second decade of the twenty-first century, had reconfigured her energy landscape. The shale revolution delivered a bounty of oil and gas at volumes unthinkable a generation earlier. Rather than withdrawing into autarky, Washington harnessed this abundance to influence global energy prices, constrain rivals dependent upon hydrocarbon rents, and underpin her own industrial revival. Yet this outward projection made American prosperity increasingly dependent upon global buyers. Amongst the largest of these, directly or indirectly, was China.

China’s extraordinary industrial base relies upon inputs that the United States is uniquely positioned to provide. Even where Beijing sources energy from the Gulf, Russia, or Central Asia, the pricing of those imports is influenced by American production volumes. Moreover China is heavily exposed to American petrochemical feedstocks, agricultural exports associated with energy-intensive practices, and the maritime infrastructure that Energy Dominance helped to shape. Beijing’s attempts to diversify suppliers, acquire stakes in foreign fields, or promote renewables have not freed her from the gravitational pull of the American energy economy. Instead, they have reinforced the reality that China’s rise depends upon a global system shaped, stabilised, and in crucial respects underwritten by the United States.

This interdependence does not mean harmony. On the contrary, it generates a constant cycle of negotiation and confrontation. Trade disputes, technology restrictions, maritime tensions, and geopolitical posturing are all symptoms of a relationship in which neither side may disentangle herself without inflicting immense damage upon her own industrial fabric. Confrontation becomes a controlled instrument for signalling priorities, managing dependencies, and extracting concessions. Negotiation, likewise, becomes perpetual because no long-term settlement is possible whilst strategic competition endures. The economic balance between them is not fixed; it shifts with innovation, investment, market access, and the political confidence of each government. Both powers therefore see advantage in calibrating pressure rather than severing ties.

Critics sometimes argue that interdependence did not prevent war in 1914, and therefore cannot be relied upon now. Yet the analogy is imperfect. What binds the United States and China is not merely commercial exchange, but the integration of entire industrial systems premised upon predictable flows of energy, capital and information. The complexity and scale of these networks would make their rupture catastrophic. Each state understands this. For all Beijing’s ambitious discourse regarding self-reliance, China’s export-led growth cannot survive without access to markets dominated by the United States and her allies. For all Washington’s insistence upon supply-chain security, American prosperity still depends upon China’s role as a manufacturing powerhouse and as a major purchaser of commodities whose prices anchor American producers’ revenues. If China stopped buying those commodities, their global prices would fall, damaging the United States' export markets. A conflict that disrupts the foundations of this relationship would undermine political stability in both states, which neither leadership is prepared to risk.

The result is a paradox. The rhetoric of Energy Dominance suggested the United States was seeking to free herself from vulnerability. In reality, by expanding her energy exports, she locked herself into a global economic architecture in which China is indispensable. Conversely, China’s efforts to reduce reliance upon American technology or markets continually run up against the structural role that American energy and finance play in global production. Both states attempt, simultaneously, to distance themselves and to preserve the system upon which their prosperity rests.

Thus the likelihood of open armed conflict is vanishingly small. Accidents, miscalculations, and regional escalations may still occur, but deliberate war between the two is improbable because the rational incentive for either state points towards managed rivalry rather than rupture. What we observe instead is a long-term competition conducted through tariffs, sanctions, diplomatic pressure, military signalling and strategic investment. Energy flows shape every stage of that process. They impose discipline on decision-makers, reminding them that economic interdependence is not a moral aspiration but a structural fact.

In this sense, Energy Dominance is less a doctrine of supremacy than a mechanism of entanglement. It strengthens American influence in global markets, yet it also ensures that the United States cannot retreat from a world in which China is a central economic actor. China, for her part, cannot escape American primacy in energy, finance, and maritime security without jeopardising her own development. Therefore the future is neither partnership nor confrontation, but an iterative negotiation in which each seeks relative advantage without tipping the system into collapse.

The policy’s ultimate lesson is that strategic interdependence has become the defining characteristic of twenty-first century great-power relations. Energy lies at the heart of that condition. So long as both states depend upon one another’s stability to maintain their own, the prospects for catastrophic conflict will remain remote, and the theatre of competition will be economic, technological, and diplomatic rather than military. The United States and China may challenge each other ceaselessly, but the bonds forged by Energy Dominance and industrial interconnection ensure that they must coexist, however uneasily, within the same global system.