In Geopolitics This Week
Exxon's Oil Drilling Strains Guyana-Venezuela Dispute, Egypt Braces for Fallout of Possible Israeli Offensive in Rafah, Gazprom Secures Rights to Iraqi Nasiriya Oil Field, and other stories.
Exxon's Oil Drilling Strains Guyana-Venezuela Dispute
ExxonMobil aggressively pushes forward expanding its lucrative Guyana deepwater drilling operations. The country continues undeterred auctioning exploration and production rights in nearby zones abutting disputed Essequibo territory still claimed by Venezuela as under its sovereign jurisdiction. With Exxon and partners having already sunk 19 successful wells and more awaiting activation, Caracas is struggling to deter Guyana in what was once considered its hard perimeter. Now, these waters are increasingly being exploited by corporate actors and other states backing Guyana's — not Venezuela’s — ambitions.
For Venezuela, once the oil hegemon across the Caribbean, this accelerated activity powerfully symbolizes the stark reversal of its production fortunes and broader declining regional influence. As its own oilfields languish amid longstanding US sanctions that have contrinuted to economic catastrophe, the irony stings of tankers now carrying cheap Guyanese fuel refined from fields considered Venezuelan patrimony. On the other hand, ascendant Guyana's leaders gain pivotal domestic credibility by standing up to Caracas' demands and rhetoric, despite the size asymmetry between countries. While neither government currently seeks open conflict, escalating claims over disputed seabed raises risks of dangerously inflaming cross-border nationalism and latent grievances.
Venezuela retains established rights to technically pursue final border arbitration on its claims through international law. Yet its drastically deteriorated bargaining position gravely hinders credible enforcement capacity against rising Guyanese ambitions, backed by Western powers seeking to pressure Venezuela across economic, rhetorical and military lines. Aside from protecting the investment of Exxon, powers like the US and UK also have broader strategic interests in keeping oil prices low, the Venezuelan economy weak, and maintaining ties with its regional allies in Colombia, Guyana and Brazil. And for Exxon, aside from massive profits, Essequibo's unusually rich geology offers long-sought opportunity to recoup assets nationalized by Venezuela during its mid 2000s oil boom. Collectively this multi-front alignment squeezes a key Russian and Chinese ally.
Given Exxon's sustained operational tempo despite objections, Venezuela must now largely rely on gradual legal arbitration over its righteous territorial claims. While processes could eventually validate aspects of Venezuelan positions, even that may fail preventing lasting economic and nationalist grievances over perceived stolen underground riches from disputed waters, intensifying latent antagonisms regardless. Yet with military and corporate partners growing only more deeply invested, Guyana projects readiness to develop fields and militarize at the same time. So the dispute remains a microcosm of powers jostling to shape frameworks governing resources, rights and authority to their benefit — playing out through Guyana-Venezuela tensions while enveloping deeper conflict beneath the surface.
Egypt Braces for Fallout of Possible Israeli Offensive in Rafah
High resolution satellite imagery reveals Egypt is hastily constructing a fortified zone right along the Gaza border. Equipped with concrete walls and shelters, the development suggests Egypt is urgently preparing for mass displacement in the event of a widespread Israeli ground assault on Rafah, Gaza's southernmost city. Israel has already ordered Gaza civilians to relocate down to the Rafah border area during its prior offensives taking control of other regions. Capturing Rafah now could deal a strategic and symbolic blow giving Israel dominance over the last urban stronghold of Palestinian resistance in Gaza.
An Israeli operation on Rafah would also likely freeze any momentum in Arab-Israeli normalization. Israel currently courts growing diplomatic and economic ties with influential Gulf states by playing up the idea of a common front against shared threats. But Arab publics still deeply prioritize solidarity with the Palestinian cause as a critical part of domestic credibility. Israeli tanks rolling through Rafah could therefore ignite outrage. This may compel leaders to at least temper cooperation with Israel, if not outright condemn military action. The tensions around Arab rulers navigating placation of public sentiment on Palestine while still building behind-the-scenes alignment with Israel remains complex.
Israel has also fanned tensions by awarding Mediterranean gas exploration licenses to international firms like Eni and Dana Energy that significantly overlap boundaries Palestine delineated for offshore resource rights upon joining the United Nations Convention on the Law of the Sea (UNCLOS) in 2015. Palestinian legal advocates argue these licenses illegitimately include over half the tendered maritime area falling within zones demarcated as Palestinian territory. Beyond moral criticisms, they make the legal case that the UN Convention on the Law of the Sea principles codified in UNCLOS do not permit one party to unilaterally control or extract resources from disputed maritime zones pending final border settlement negotiations. With the gas field licenses, Israel stands accused of denying Palestinian access to develop their own offshore energy assets, while profiting from sales Palestinians are barred from tapping themselves due to Israeli control over territorial waters.
The current region-wide escalatory risks flow directly from the clashes within Gaza itself. Israel's ongoing ground operations and strikes within Gaza prompt retaliatory rocket attacks towards Israel's heartland. In turn, Israel cites the militants' rocket barrages as justification for further military action in Gaza, resulting in an action-reaction cycle that entrenches hostility on all sides. Wider ripple effects stem from how other state and non-state actors then exploit the conflict to advance their own interests — with potential for reactive strikes or interventions rallied under the banner of protecting allies. This interconnectedness risks pulling the crisis into broader regional conflagration. All parties feel their military involvement protects immediate self-interest.
Gazprom Secures Rights to Iraqi Nasiriya Oil Field
Russian energy giant Gazprom has secured exclusive rights from Iraq to rehabilitate and develop the massive Nasiriya oil field. With over 4 billion barrels in estimated reserves, the 20-year deal grants Gazprom control over expanding production up to 85,000 barrels per day in the agreement's initial phase. Meanwhile, China concurrently expands its own presence across strategic Iraqi energy projects like the Halfaya gas processing plant — eyeing stronger economic and geopolitical footholds in the oil-rich Middle East.
For sanctioned Russia and rising China, securing control over a greater share of the world’s remaining hydrocarbon reserves allows the advancement of national development goals and works to counterbalance US energy dominance. However, the realignments raise complex ripple effects. Domestically within Iraq, the influx of external investment may assist financing for national rebuilding and stabilization. However, the same deals also widen pathways for cronyism and resource misappropriation through Iraq's oil-funded patronage networks.
With Sino-Russian interests seemingly superseding Western sway in Iraq, further impacts emerge on global energy markets and OPEC+ dynamics. Bringing additional Iraqi oil capacity online could ease fuel costs for import-dependent countries but also risks destabilizing output quotas designed to buoy prices. Alternatively, since aging infrastructure severely hampers Iraq's actual production volumes regardless of rights awarded on paper, the shuffling of contracts between powers could be more symbolic positioning than substantive. While presence equals influence, questions remain over whether Moscow or Beijing can bring online a level of production that offers real energy leverage.
The Nasiriya oil agreements likely reflect short-term transactional interests on both sides rather than a deep enduring alliance. Iraq courts any outside investors that can technologically resuscitate its limping production while Russia and China simply seek to expand energy market influence wherever possible. Yet by locking in contracts today across Iraq's immense fields, the two Eastern giants secure their own geopolitical possibilities tomorrow if oil demand persists. For the US, the slow slide of Iraqi crude out of direct US orbit closes off strategic partnerships further limiting already constrained options to project influence.