In Geopolitics Today: Monday, December 4th
Venezuela Claims Disputed Region in Referendum, Red Sea Attacks Hike War Risks for Middle East Shipping, and other stories.
Venezuela Claims Disputed Region in Referendum
Venezuelans turned out to vote on Sunday for a government-backed referendum upholding Venezuela's claim to a disputed region controlled by Guyana. The vote asked citizens to reject the 1899 Paris Arbitral Award which set the current border, with about 98% supporting this rejection.
Venezuela has long argued that the mineral-rich Essequibo region was stolen in that agreement made while Guyana was a British colony. While President Maduro claimed the vote as a historic victory with 10 million participating, some observers questioned the turnout figures. The referendum likely increases tensions with Guyana, which contends the vote threatens regional stability. But its practical impacts remain unclear, as much depends on how forcefully Maduro pursues Essequibo in the wake of a vote where the majority supported Venezuela's demands.
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Philippines Confronts China with New S. China Sea Base
The Philippines inaugurated a new coast guard monitoring base on the disputed Thitu Island in the South China Sea, the latest move asserting Manila's claims in the tense region. The facility boasts advanced radar and communications to better track Chinese maritime forces that have increasingly harassed Philippine ships.
While President Marcos Jr has avoided confrontational rhetoric towards China, adopting a “double game” of cooperation and deterrence, his defence establishment is taking a harder line. The defence minister has questioned the value of engaging Beijing at all. The Philippines conducted joint patrols with the US and Australia, with plans to regularize missions involving other allies. China accused Manila of worsening tensions.
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West Cracks Down on Russian Oil Shipping Workarounds
The European Union, the United States and the United Kingdom are urging the flag states of Liberia, the Marshall Islands and Panama to increase oversight of ships to ensure they do not transport Russian oil sold above the $60 price cap. Nearly 40% of Russia's fleet dodging the oil price cap restrictions sail under the Marshall Islands flag.
The West aims to tighten enforcement of the price ceiling without reducing Russia's seaborne oil exports, making sanction evasion costlier for Moscow. The letters warn of increased efforts to circumvent the price cap and, offering Western services for suspect tankers seeking flags of convenience. While the three flag states are not themselves at risk of sanctions, the shipping communication reveals growing Western urgency to constrict Russia's wartime revenue as it turns to Asia to sell discounted oil. But policing the vast shadow fleet and preventing ship-to-ship oil transfers represents an immense challenge even with greater flag state diligence.
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Mineral Supply Fears Haunt the Clean Energy Transition
The mineral demands of clean energy technologies are expected to double by 2040 as most countries pursue lower emissions. Ten raw materials including lithium, cobalt and rare earths are deemed critical by the United States, European Union and China for their green transition.
After relying on imports for decades, the US and EU now seek greater self-sufficiency in key minerals. But China dominates production in items like rare earths, graphite and cobalt. Although the top carbon emitter itself, China's dominance across critical mineral refining and processing confers geostrategic benefits as other states vie to secure supplies for their energy transition. This dependency will challenge Western environmental ambitions unless new mining and processing capacity is developed.
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France and Australia Bury Submarine Feud with Defence Pact
France plans to allow Australian naval forces access to its military facilities in the Pacific, signalling a thaw in relations following fury over the AUKUS pact. The agreement boosts Canberra's regional reach while underscoring shared concerns over growing Chinese assertiveness. France retains territories across the Pacific and Indian Oceans, strategic hubs that will now facilitate a more sustained Australian presence.
The deepening defence ties come two years after Australia enraged France by scrapping a $90 billion submarine deal in favour of nuclear-powered subs under AUKUS. After sharp criticism from Paris, the new Australian government has prioritized rebuilding trust. Beyond military coordination, the roadmap pledges cooperation on climate, education and upholding the status quo in the region. The pledge to oppose coercion and destabilization in the South China Sea and Taiwan Strait highlights joint efforts to deter China.
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Red Sea Attacks Hike War Risks for Middle East Shipping
War risk insurance premiums for commercial vessels transiting the Red Sea have increased following missile strikes on three ships by Yemen's Houthis. The rebels warned of further attacks on vessels linked to Israel, escalating dangers even for non-Israeli shipping. Re-routing around the Red Sea could add tens of thousands in costs, with war risk premiums doubling from 0.03% to up to 0.1% of a ship's value for a 7-day journey.
While the Houthis cited Israeli ties, the attacked ships had connections to 14 countries without direct Israel links. But with missiles striking international waters, risks now apply more broadly. Shipowners may opt for longer alternative routes, despite higher fuel costs, to avoid entanglement as the Yemen war spills over. The uncertainty complicates journeys through critical choke points like the Red Sea and Strait of Hormuz as regional powers joust.