In Geopolitics Today: Friday, January 10th
China Deepens Military and Financial Ties with Nigeria, US Imposes Major Energy Sanctions on Russia, and other stories.
China Deepens Military and Financial Ties with Nigeria
Nigeria and China are deepening their military and financial cooperation, with Beijing pledging military training for 6,000 African troops and Nigeria seeking to expand a $2 billion currency swap agreement. China's defence aid includes support for domestic weapons production in Nigeria, while trade between the nations continues through Chinese infrastructure projects and technology investments. The developments come amid China's 35-year tradition of New Year diplomatic tours to Africa, with Foreign Minister Wang Yi visiting Nigeria, Namibia, Chad, and the Republic of Congo.
This expansion of Sino-Nigerian ties highlights Africa's growing importance in global economic alignments. China's military training and currency swap programmes offer Nigeria alternatives to Western defence and financial systems, particularly significant as Nigeria battles domestic security challenges. The partnership also strengthens China's position in Africa's largest economy, building on Beijing's existing $50 billion continental aid package. For Nigeria, closer ties with China provide leverage in its bid for a permanent UN Security Council seat, though increased cooperation with Beijing may strain relations with Washington under the incoming Trump administration.
Read more about this story here.
UK Sanctions Venezuelan Officials
The United Kingdom has imposed sanctions on 15 Venezuelan officials, including Supreme Court justices and military commanders. The measures, which include asset freezes and travel bans, target key figures such as Supreme Court Chief Justice Caryslia Rodriguez and military intelligence director Asdrúbal Brito. This follows Venezuela's July 2024 presidential election, which UN experts and The Carter Center reported showed significant vote count discrepancies.
The sanctions expand the UK's existing restrictions on Venezuelan officials amid post-election developments that saw over 2,400 arrests and 25 deaths during protests. The measures align with similar international actions, as Venezuela faces an ongoing International Criminal Court investigation. For the UK, these sanctions represent an attempt to increase pressure on Caracas while strengthening its own diplomatic position through coordinated action with allies in Latin America and beyond.
Read more about this story here.
Russian-Azerbaijani Crisis Deepens
The downing of an Azerbaijani civilian aircraft over Chechnya has created a significant diplomatic crisis between Russia and Azerbaijan. Brazilian experts have confirmed anti-aircraft damage to the plane that crashed in Kazakhstan on December 25, killing 38 people. The incident occurred during Ukrainian drone attacks on Chechnya. Azerbaijan's President Aliyev has demanded accountability and accused Russia of attempting to cover up the incident.
Moscow faces a strategic bind as Chechen leader Ramzan Kadyrov's grip on regional security forces blocks accountability. Kadyrov, who maintains a private army, effectively prevents Russian federal intervention. With Azerbaijan threatening access to the vital North-South economic corridor supporting Russia's war effort, Moscow must choose between confronting Kadyrov's autonomy in Chechnya or risking its relationship with a key regional partner. The crash investigation results from Kazakhstan are expected by month's end.
Read more about this story here.
US Imposes Major Energy Sanctions on Russia
The United States has imposed sweeping sanctions on Russia's energy sector, targeting two major oil producers, 183 vessels, and their trading networks. The measures will severely disrupt India's oil supply, with Indian refiners already seeking alternatives to their 1.52 million barrels per day of Russian imports. The sanctions close crucial payment and insurance loopholes while giving companies until March 12 to wind down transactions.
Global oil prices have surged toward $80 per barrel as markets anticipate major supply disruptions. India's forced shift to Middle Eastern suppliers will intensify competition for non-Russian oil, potentially driving prices higher across Asia. The sanctions target Russia's primary source of revenue, just as previous measures have pushed Russian inflation to 10% and interest rates above 20%. By disrupting Russia's ability to sell oil to Asia, these restrictions aim to cut funding for Moscow.
Read more about this story here.
Foreign Banks Shift from US Treasuries to Gold
US Treasury yields continue climbing as global central banks reduce their holdings of American government debt, with interest payments on federal debt reaching $1 trillion — up from $400 billion in 2021. Foreign institutions have shifted towards gold following the 2022 seizure of Russian reserves, contributing an estimated 0.8 percentage point rise in yields. This shift marks a stark contrast to the 2007-2012 period when foreign central banks, particularly China, doubled their Treasury holdings to $4 trillion to support the US financial system during its crisis.
The reduced foreign appetite for US debt comes as America's federal deficit exceeds 6% of GDP, with a borrowing requirement of $1.8 trillion. This combination of declining foreign support and rising borrowing needs has significant implications for global markets, strengthening the dollar while depressing stock prices and rate-sensitive sectors like housing. The break in the historical relationship between gold prices and Treasury yields since March 2022 further signals a shift in how central banks view US government debt as a reserve asset, with many opting for physical gold that cannot be seized through sanctions.
Read more about this story here.
Japan Expands Military and Energy Partnerships in Southeast Asia
Japan's economic and military cooperation with Malaysia and Indonesia centres on energy security and maritime capabilities. Trade between Japan and Malaysia reached $34.41 billion in 2023, with new agreements focusing on carbon capture technology and rare earth processing. The Malaysian coast guard will increase joint operations with Japanese forces, while Indonesia is set to acquire Japanese high-speed patrol vessels. These arrangements build on Japan's recent defence agreements with Vietnam and the Philippines that enable troop movements and military technology transfers.
Japan's investment in Southeast Asian maritime capabilities and energy infrastructure provides regional states with tangible resources to enforce their territorial claims and economic zones. While the US remains the dominant naval power in the Pacific, Japan's patrol vessels, radar systems, and technical training give Southeast Asian forces improved monitoring and response options in disputed waters. The energy partnerships — from gas supplies to carbon capture — also reduce regional dependence on Chinese infrastructure investment. Southeast Asian states are using these Japanese partnerships to build military capabilities and critical infrastructure without fully aligning with either the US or China.