We appear to be in the very early stages of a deadly game of what might be called 'petroleum musical chairs', in which no country wants to be left standing without a chair when the music stops.

The more and more that countries try to lock in oil supplies, either through very long-term contracts and/or defacto security-for-oil arrangements (such as might be suggested by Iran recently becoming so chummy with China), the smaller will be the true oil market place. It's crudely analogous to the owner of a grocery store in time of famine taking his stock off the shelf so he can promise his family and friends a food supply.  

A recent comment pointed out that when one factors in the cost of military protection of petroleum supplies, the real cost of those supplies can much greater than the apparent 'market' price. I agree with this notion completely and think it is quite purposely overlooked by our government. The math is pretty depressingly simple: Take some reasonable fraction of our annual defence spending and allocate it to protecting our oil imports from the Middle East (say at least 25%), then divide that by the annual amount of oil we actually import from that region. When you do this, you get a suprisingly large number, which when added to the apparent market price makes for some VERY expensive oil.  I have always maintained that it is THIS combined price that should be used when comparing alternative energy with established fossil fuel systems.

But getting back to China and other countries frantically trying to scrounge up secure sources of oil,  I see no other outcome but for this situation getting more contentious and dangerous. The logical end point is global armed conflict over oil supplies, a conflict that I could easily picture going nuclear. Markets mean nothing when the law of the jungle takes over.