In Geopolitics This Week
Tensions Rise as the US and Iran Seize Oil Vessels, Norway Unveils Natural Gas Nationalization Plan, US and Philippines Agree on New Military Guidelines, and other stories.
Tensions Rise as the US and Iran Seize Oil Vessels
In recent weeks, tensions have flared up between the United States and Iran, leading to the seizure of vessels. Last week, a tanker of Iranian crude oil destined for China was ordered to redirect towards the US by the US Department of Justice. The Suez Rajan was under a court order obtained with the involvement of another company. The US had intervened to seize the ship loaded with Iranian crude as Washington steps up enforcement of sanctions on Tehran.
Seemingly in response, has seized two oil tankers in the span of a week. Iran seized the Marshall Islands-flagged tanker, the Advantage Sweet, when members of the Iranian Navy boarded and took command of the vessel. Barely a week later, another oil tanker was seized by Iranian naval forces after it collided with an Iranian boat near the Strait of Hormuz, which is a chokepoint for at least one-third of the world's seaborne oil. The ship was just leaving Kuwait and headed to Texas. The US Navy has condemned Iran's actions, denouncing its harassment of vessels and accusing it of interference.
These incidents are the latest in an ongoing shadow war between the United States, Israel and Iran, the conduct of which largely remains in the grey-zone. The US and Israel have imposed sanctions on Iran's Revolutionary Guard Corps, while Iran has a history of seizing tankers in response to western countries targeting its crude oil shipments. The incidents highlight the vulnerability of seaborne oil transportation at one of the busiest sea-lanes in the world at a precarious time.
Norway Unveils Natural Gas Nationalization Plan
Last Friday, Norway’s oil and energy ministry announced plans to nationalize the country’s natural gas pipelines within the next five years. This would give the country greater control over its critical infrastructure. However, existing concessions, which are not due to expire until 2028, stand in the way of an immediate nationalization. Norway’s gas pipeline network is currently owned by Gassled through a decades-long partnership by offshore oil and gas producers in the area.
Norway became Germany’s single-largest natural gas supplier last year, overtaking Russia, with Germany’s gas imports dropping by 12.3%. Norway provided Germany with 33% of all the gas it imported in 2022, while Russia’s share of the German gas market fell to 22% last year. Norway exported more than 120 billion cubic meters of gas the same year, mainly via its pipelines, making it Europe’s largest gas supplier. This position will give Norway more leverage as Europe looks for ways to reduce its dependence on Russian gas.
While Oslo's recent decision to nationalize its natural gas infrastructure has garnered attention, energy companies are also eyeing the Arctic as a potential source of undiscovered oil and gas resources. The Norwegian government is actively encouraging drilling operations in the region, with hopes of boosting energy security and supporting European partners with energy supply. However, developing these resources in the Barents Sea presents challenges, such as the lack of existing infrastructure and the harsh environment.
Companies like Var Energi and Equinor are committed to exploring and developing resources in the Arctic, citing successful exploration wells in recent years and a need to maintain production. The Norwegian government has proposed including additional areas of the Arctic in the next licensing round, further signalling its commitment to developing the country's petroleum industry.
US and Philippines Agree on New Military Guidelines
The United States and the Philippines have agreed on new military coordination guidelines, including the transfer of three C-130 aircraft to the Philippines. The two countries discussed strengthening military cooperation and deepening economic ties in the Indo-Pacific region during President Ferdinand Marcos Jr.'s state visit to the US from April 30 to May 4. The visit followed a near-collision between Philippine and Chinese coast guard vessels in the South China Sea.
The US Department of Defense issued a six-page document on May 4, which outlines its defence commitments under the US-Philippines Mutual Defense Treaty. The department clarified four criteria: the geographic scope of the treaty, Philippine entities the United States is committed to defending, intelligence sharing protocols, and ways Washington plans to counter Chinese grey zone capacities in the region. The document expands US commitments to defend the Philippines if it is attacked “anywhere in the South China Sea” and not only in the so-called West Philippine Sea — the area of the disputed waters claimed by the Philippines as part of its exclusive economic zone.
The US and the Philippines' recent meetings and announcements aim to reinvigorate defence ties and strengthen defence cooperation in the South China Sea. The recent collaboration and agreements between the US and the Philippines could increase the risk of a direct military confrontation with China. Closer military ties with the US while also maintaining positive economic and trade ties with China will be challenging for the Philippines. The as it will likely damage the country's relations with Beijing by facilitating a larger US military footprint near Taiwan.