In Geopolitics Today - Monday, January 17th
Latin American Oil Giants Under Stress, Yemeni Forces Strike Inside the UAE, Geological Activity Severs Communications in Tonga
Latin American Oil Giants Under Stress
Once powerful players in global energy markets, Latin American oil companies today are struggling. Brazil’s state-run oil company has raised the price of gasoline and diesel in a move that is designed to avoid shortages. Venezuela is reportedly ready to resume exporting diluted crude for the first time in months, but remains crippled by US sanctions and sabotage attacks on its pipeline network. Whereas Mexico’s government is determined to get the struggling state-owned Pemex back on its feet.
Brazil’s state-run oil company has raised the price of gasoline and diesel prices, a move that is designed to avoid shortages, but will mean Brazilian motorists are likely to pay more at the pump. In Venezuela, for the first time in a century, there are no more rigs searching for oil reserves. While the country is reportedly ready to resume exports of diluted crude for the first time in months, it still faces problems as its pipeline network is under constant attack, with another pipeline explosion taking place last week. Mexico’s government has been moving ahead with a revamp of the country’s energy sector in an attempt to get the state-owned energy giant Pemex back on its feet. The government has reportedly cut Pamex’s debt by $3.2 billion, but the company remains buried under $113 billion in debt, the most of any state oil firm in the world.
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Yemeni Forces Strike Inside the UAE
Authorities in the United Arab Emirates have acknowledged an attack involving drones and missiles undertaken by Houthi forces took place inside the country. Since the attack, Abu Dhabi has said that its armed forces have a right to retaliate, and said that those responsible for the attack will be held accountable. Saudi Arabia, Bahrain, Qatar and the Organisation of Islamic Cooperation all jointly condemned the attack.
The attack came after the Saudi-led coalition — of which the UAE is a part of — announced major advances against the Houthis in recent weeks. Another point of contention arose two weeks ago, when Houthis seized a UAE-flagged ship off the coast of Yemen, claiming it was carrying weapons and munitions intended for fighters. The coalition has been also imposing a strict blockade on the country’s ports and airports as part of its efforts to reinstate former president Abdrabbuh Mansour Hadi. While the UAE has reduced its contributions to the Saudi-led coalition effort in recent years, tensions have flared up over recent weeks, and this latest attack could work to pull Abi Dhabi back into deeper engagement in the ongoing conflict in Yemen.
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Geological Activity Severs Communications in Tonga
The eruption at the Hunga Tonga-Hunga Ha’apai volcano recorded a 7.8-magnitude earthquake which triggered tsunami waves from Tonga across the Pacific Ocean. Estimated to have exerted a force equivalent to 1,000 15-kiloton nuclear bombs, the eruption is said to have been audible more than 750km away in Fiji, and the consequent tsunami is said to have been felt as far as Peru, Ecuador and California.
As a result, Tonga’s communications with the outside world are largely severed, with international telephone lines and the internet still out of service. Some estimates expect that it will be several weeks before international phone lines and access to the internet would be restored in Tonga. An assessment of the damage caused to the country’s only submarine cable showed two breaks; one of which was located close to the volcano. There is a chance that further delays might be caused in the event that more eruptions are felt, or if the tsunami has buried communications lines in the sea bed.
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