In Geopolitics Today: Thursday, September 12th
UAE Emerges as Strategic Battleground Between China and US, Norway Lifts Arms Export Ban on Turkey, and other stories.
UAE Emerges as Strategic Battleground Between China and US
The United Arab Emirates has emerged as a key strategic battleground between China and the United States. Recent deals underscore both powers' efforts to secure influence in this vital Middle Eastern hub. China's CNOOC signed a strategic alliance with ADNOC, while the U.S.'s ExxonMobil partnered with ADNOC on a major hydrogen project.
The UAE's strategic value stems from its geographic position and infrastructure. Fujairah port, located outside the Persian Gulf, offers a crucial alternative to the Strait of Hormuz for oil shipments. The UAE has become a global energy pricing center, hosting the Dubai benchmark and expanding its trading capabilities. Its oil output is set to increase from 4 million to 5 million barrels per day. China views the UAE as integral to its Belt and Road Initiative, leveraging it to extend control over key energy routes. The U.S. sees the Emirates as vital to its regional strategy and a potential link to India. This competition reflects the UAE's growing importance in shaping the balance of power in the Middle East and beyond.
Read more about this story here.
Europe Slashes Russian Energy Imports
Europe's response to the energy crisis, triggered by the geopolitical upheaval following Russia's invasion of Ukraine, has been a testament to its resilience and adaptability. The European Union swiftly reduced its dependence on Russian fossil fuels, cutting imports from $16 billion per month in early 2022 to around $1 billion by the end of 2023.
This was achieved through a combination of reviving coal plants, increasing gas imports from Norway, and significantly expanding renewable energy sources. The EU's decisive actions underscore its determination to not only secure energy independence but also to accelerate its green transition, despite the associated economic challenges. By diversifying its energy sources and reducing external dependencies, Europe has strengthened its position and demonstrated that a rapid energy transition is feasible when backed by strong political consensus. However, this shift has prompted Europe to manage new dependencies as it navigates the complexities of global energy markets.
Read more about this story here.
Uzbekistan Balances Russian Pressure to Join Eurasian Economic Union
Russia is seeking to draw Tashkent into the Eurasian Economic Union (EAEU), yet Uzbekistan remains cautious. Despite Russia's strategic interest in integrating Uzbekistan, due to its growing population and potential to bolster the EAEU's demographic weight, Tashkent has refrained from making firm commitments. Instead, Uzbekistan continues to balance its strategic partnership with Russia while maintaining autonomy in its foreign policy decisions.
This cautious approach by Uzbekistan reflects a broader regional trend where Central Asian states, wary of over-dependence on Moscow, strive to maintain a degree of independence amidst Russia's geopolitical manoeuvres. Great powers are sensitive to shifts in their sphere of influence, and Uzbekistan's stance illustrates its desire to navigate the complex dynamics of regional power politics without provoking Moscow. This strategy allows Uzbekistan to benefit from economic cooperation with Russia, such as favourable energy deals, while avoiding entanglement in Russia's broader geopolitical ambitions.
Read more about this story here.
OPEC+ Production Cuts Create Tension with Major Oil Companies
OPEC+ has decided to maintain its production cuts of 2.2 million barrels per day until at least December. While these cuts are intended to stabilize oil prices, they also create tension with major oil companies like Exxon and Chevron, which have significant investments in OPEC countries. These companies face a dilemma as state-controlled production limits their returns, yet they remain deeply invested in these regions due to the critical role OPEC plays in global oil supply.
The enduring relationship between OPEC and major energy corporations is characterized by both cooperation and competition. On one hand, OPEC's ability to influence oil prices benefits oil companies by maintaining profitability in a volatile market. On the other hand, the production cuts highlight the tension between national interests and the profit motives of private investors. While energy companies focus on maximizing profits, they must navigate the complexities of investing in regions where state control is prevalent.
Read more about this story here.
Norway Lifts Arms Export Ban on Turkey
Norway has lifted its 2019 defence export ban on Turkey, resuming arms sales to its NATO ally. The embargo, imposed after Turkey's Syrian incursion against Kurdish forces, had slashed exports from $4 million in 2018 to $1 million in 2020. This follows similar moves by Sweden, Finland, Canada, and the Netherlands.
The reversal signals a strategic shift in NATO dynamics, driven by Turkey's recent approval of Finnish and Swedish membership. By lifting arms embargoes, NATO members are prioritizing alliance cohesion and strengthening its southeastern flank in the face of perceived Russian threats. This realpolitik approach sidelines previous concerns about Turkey's actions against Kurdish forces in Syria and strengthens NATO's eastern flank, but risks alienating Kurdish allies, and could even embolden Turkish operations in Syria. The decision reflects NATO's current calculus: maintaining a united front against Russia takes precedence over concerns about Turkey's regional policies.
Read more about this story here.
Haniyeh Assassination in Tehran Poses Strategic Dilemma for Iran
The assassination of Ismail Haniyeh in Tehran has plunged Iran into a strategic dilemma that could reshape its role in the Middle East. This unprecedented breach of Iranian security by Israel not only struck at a symbol of Tehran’s support for Palestinian resistance, but also exposed vulnerabilities that Iran has long sought to conceal. For Tehran, the assassination was a direct challenge to its authority and a stark reminder that it is not impervious to Israeli action, even within its own borders. This strike forces Iran into a precarious position, caught between the need to respond forcefully to preserve its credibility among regional allies and the risk of provoking a broader conflict that could spiral out of control.
Iran’s strategic predicament extends beyond mere retaliation; it touches on the core of its regional strategy and its ability to project power through a network of proxies across the Middle East. A forceful retaliation could provoke a severe Israeli response and potentially draw the United States and other Western powers deeper into the conflict, threatening to escalate into a full-scale war that neither Iran nor its allies can afford. Conversely, a restrained approach risks emboldening Israel and signalling weakness, potentially diminishing Tehran’s influence over its proxies and undermining its standing as the vanguard of anti-Israeli resistance. Iran's leaders must weigh the costs of each potential move in a context of economic hardship, international isolation, and domestic unrest. As Tehran grapples with these choices, the assassination of Haniyeh marks more than a targeted killing; it is a turning point that places Iran at a strategic crossroads, testing its resolve and reshaping the regional balance of power.