In Geopolitics This Week
China and Russia Partner on Satellite Navigation, The EU Sanctions Iran over Drone Deliveries to Russia, The United States to Refill the SPR When Oil Prices Fall below $72, and other stories.
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China and Russia Partner on Satellite Navigation
China and Russia have signed contracts to host ground stations for their respective global navigation satellite systems, BeiDou and GLONASS. These stations will improve the performance of their domestic alternatives to the US operated GPS system, providing improved precision, navigation, and timing services for both military and civilian purposes.
The contracts were signed during a meeting of the Project Committee on Important Strategic Cooperation in Satellite Navigation. Under the contracts, Beijing will place three ground monitoring stations at various locations in Russia, while Moscow will set up the same number of stations in China. The move comes as part of a bilateral process which cultivates cooperation between the networks of ground stations already built in both countries in recent years. Sino-Russian talks on the mutual hosting of ground stations have been ongoing since at least 2014.
Last month’s agreements are only the latest development in a growing Sino-Russian partnership in outer space. Their satellite navigation cooperation has seen the two sides recently sign an agreement that seeks to build complimentary between the Russian and the Chinese systems. This is a key first step toward broader interoperability between the two, which can work to improve the accuracy and reliability of both systems. Looking ahead, Moscow hopes China can help with sourcing microelectronics to meet its military and economic needs.
The EU Sanctions Iran over Drone Deliveries to Russia
Iran has reportedly promised to provide Russia with surface-to-surface missiles and more drone systems. A deal is said to have been agreed earlier this month when senior Iranian officials visited Moscow for talks with Russia. The transfer of more arms between Iran and Moscow threatens Ukrainian-Iranian ties and may draw more sanctions from Brussels, London and Washington.
Russia is finding it more difficult to produce weaponry for itself given the sanctions on its industrial sector and so was turning to imports from partners like Iran and North Korea. This in turn has allowed Moscow to field the relatively cheap but very effective strike drones, utilizing them to great effect to conduct strikes across Ukraine. A spate of Russian attacks using Iranian-made Shahed-136 drones have already seriously damaged Ukrainian energy infrastructure in recent weeks as Iranian drones have proved difficult to counter with traditional anti-air systems.
In response to the transfer of missiles and drones from Iran to Russia, the European Union agreed on a new set of sanctions against Iran, justified as retaliation over the use of Iranian drones in Ukraine. After 3 days of talks, EU ambassadors came to an agreement that will sanction those Iranian entities directly associated with supplying drones to Russia.
Iranian drone systems are stressing Ukraine's air defences and providing Moscow a cheap alternative to using its air forces. The sanctions imposed by Brussels target Shahed Aviation Industries and three Iranian armed forces generals. The EU announcement added that the bloc was also prepared to extend sanctions against four other Iranian entities already on the sanctioned list. Iran continues to deny supplying the drones to Russia, while Russia has denied using Iranian drones in Ukraine.
The United States to Refill the SPR When Oil Prices Fall below $72
The United States has announced a set of new actions aimed at strengthening US energy security, encouraging production increases, and bringing down fuel prices. This will involve buying crude oil in order to replenish the strategic petroleum reserve when prices fall to between $67 and $72 per barrel.
The US Department of Energy (DOE) has noted that a sale of 15 million barrels of crude oil is set to be drawn from the Strategic Petroleum Reserve (SPR) in December 2022, marking the last sale of the 180-million-barrel drawdown that the US President announced in March. The President is also calling on the DOE to be ready to move forward with additional significant SPR releases this winter, though none are yet planned. The President’s decision to initiate efforts to refill the SPR by purchasing crude oil at or below $67-$72 per barrel will add to global demand at those prices.
Replenishing US crude stockpiles will not be easy as thus far this year, 177 million barrels have already been sold off from the SPR. With the global energy market soon expected to suffer a loss of more than 2 million barrels per day less. As such, it is unclear where the source of this crude oil would be if Washington were to make major purchases on long-term contracts.