China Announces Major Oil Deal With Afghanistan

China Announces Major Oil Deal With Afghanistan

( – On January 5, the People’s Republic of China (PRC) reportedly struck a $540 million deal with the Taliban to extract oil from Afghanistan.

The agreement is a demonstration of the recent interest China has taken in the Islamic Emirate. It’s poised to create tension where Washington’s interests are concerned, and could negatively impact the US’s influence in the region.

This is the largest investment the Taliban has made in energy since it took over Afghanistan’s rule in 2021.

China’s demand for crude oil has been on the rise since the start of the pandemic. Despite escalating ISIS-K terrorist attacks directed toward Chinese nationals, the PRC elected to move forward with its oil extraction deal.

The news comes after a December 2022 ISIS-K attack on a hotel in Kabul where Chinese business executives often stay. On January 11, 2023, a suicide bombing was carried out just outside the Afghan foreign ministry.

Northern Afghanistan’s Amu Darya Basin has massive oil reserves, with current estimations around 87 billion barrels. This is where extractions for the PRC will take place.

Afghanistan is also rich in minerals and precious metals such as lithium, aluminum, iron ore, copper, and chromite–worth an estimated $1 trillion. These largely untapped resources may be more readily available to China as its relationship with the Taliban deepens. Metals such as lithium are required for the production of electric vehicles and high-powered batteries.

With Afghanistan’s wealth of resources, it’s an important strategic location for multiple major world powers. Could the United States’ interest be overshadowed by China’s clout?

The fact that Russia, Iran, and China are all invested in Afghanistan to some degree should give the US pause. Could radicalism continue to grow in the region, becoming even more detrimental to US interests?

Regardless of the possible outcomes and global response to this oil deal, the fact is that alliances and business deals forged in one region of the world could very well have a global impact.

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