CNOOC also happens to be China's biggest producer of offshore natural gas. Natural gas may turn out to be the top resource in the South China Sea, as the U.S. Geological Survey has estimated that resource, not oil, makes up 60% to 70% of the ocean's hydrocarbon deposits.

The greasy truth about the South China Sea dispute is that China will probably win it. It has the world's second largest world economy, surpassing Japan's as Asia's most important. Fellow South China Sea claimants increasingly depend China for tourism, economic cooperation and a market for exports, so the smaller countries are likely to keep pressing for a diplomatic resolution that keeps China happy.

For economic and geopolitical reasons, the U.S. doesn't want a fight with China, despite a series of gestures this year in support of its former colony, the Philippines. Whatever Washington does next, it should fall way short of sending warships to pursue the Chinese. All this means that CNOOC will be left alone to see how much it can dig up from beneath the ocean floor.

At the time of publication, the author had no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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