T HE S TRATEGIC I - MPACT OF  E

CDA Institute

While the world economic crisis resulting from the collapse of the housing derivatives bubbles in the US and in Western Europe, and the forced sale of assets in the consequent de- leveraging process has driven the price of oil sharply down, this price decline may well turn out to be a temporary blip on the long term energy pricing trend. [...] Recent piracy activities in the area of the Horn of Africa and the area of the Straits of Malacca also remind us of the dependency of oil consuming states on uninterrupted access to secure energy lines of communication, a reality leading to states‘ efforts to bypass chokepoints by establishing alternative port facilities closer to sources, such as the Chinese development of port facilities in Paki. [...] The first was the importance of particularly the great sea corridor emerging from the Persian Gulf and passing through the Indian Ocean, the Strait of Malacca, and the South China Sea—a route critical to the economic security of the four big economies which depend upon it: India, China, Japan, and South Korea. [...] In fact, the very first military objective during the 2003 invasion of Iraq was to secure the oil fields and refineries of southern Iraq, and when entering the city of Baghdad, the 14 military made it a priority to seize the oil ministry building. [...] The potential reserves in the Beaufort Sea have been foremost in the rhetoric about the Canada-US boundary in the Arctic and will figure strongly in the development of submissions to the United Nations Convention on the Law of the Sea (UNCLOS).