In Geopolitics Today: Monday, May 19th
Kurdistan Signs $110 Billion US Energy Deals, UK-EU Sign Defence Deal and Extend Fishing Access to 2038, and other stories.
Iraqi Kurdistan Signs $110 Billion in US Energy Deals
The Kurdistan Regional Government in Iraq has secured two major energy contracts with US companies worth a combined $110 billion. Prime Minister Masrour Barzani formalized agreements with HKN Energy/ONEX joint venture and WesternZagros developing gas and oil fields containing 13 trillion cubic feet of natural gas and 900 million barrels of oil. HKN Energy will extract 8 trillion cubic feet from the Miran field, generating $40 billion, while WesternZagros develops the Topkhana-Kurdamir block for $70 billion in projected revenue. Both contracts deliberately bypass Iraq's federal government, despite Iraq's Supreme Court declaring Kurdish oil laws unconstitutional in 2022.
Kurdish oil exports remain suspended since March 2023 when Baghdad halted pipeline flows to Turkey's Ceyhan port after winning legal challenges against the KRG's independent export system. The Association of the Petroleum Industry of Kurdistan representing eight international companies demands immediate reopening of the Iraq-Turkey pipeline following the Arab Summit. US diplomatic support for Kurdish energy development directly counters Iranian influence in northern Iraq while addressing $1 billion in unpaid debts to Western operators. The agreements prioritize electricity generation for Kurdish territories before establishing export capacity. Baghdad maintains these contracts lack legal validity, while Washington actively encourages their implementation, creating direct tension between federal and regional authorities over Iraq's most valuable natural resources.
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Russia-Ukraine Hold First Direct Talks Since 2022
Russia and Ukraine conducted initial negotiations in Istanbul on May 17, 2025, their first direct diplomatic contact in over three years. The two-hour meeting yielded only prisoner exchange agreements while establishing a preliminary framework for ceasefire discussions. Multiple diplomatic channels activated simultaneously on May 19 with the Vatican, Turkey, and Switzerland positioning as potential neutral venues for substantive negotiations. Russia proposed drafting a memorandum outlining possible treaty terms, while Ukraine stipulated unconditional ceasefire as prerequisite for comprehensive talks.
Russia controls 20% of Ukrainian territory, with frontline positions largely unchanged despite high-casualty offensive operations in eastern regions. Ukrainian diplomatic strategy directly connects sanctions relief to Russian withdrawals, cessation of hostilities, and prisoner releases. The Russian negotiating position centres on territorial recognition and limitations to Ukraine's NATO integration. Combat operations continue, with Russian forces making marginal territorial gains. Ukraine faces growing resource constraints affecting frontline capabilities as stockpiles deplete. Economic factors drive both sides' negotiating positions: Russia requires sanctions relief to restore trade access, while Ukraine needs security guarantees and reconstruction funding. The Istanbul meeting represented the first tangible outcome from international pressure for direct engagement after three years of proxy diplomatic efforts.
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Militia Clashes Shut Tripoli Port
Armed conflicts between competing militias forced shipping diversions from Tripoli's port on May 19, 2025, disrupting maritime traffic following the May 12 assassination of militia commander Abdel Ghani al-Kikli. Prime Minister Dbeibah's aligned 444 Brigade killed al-Kikli, triggering battles with the Special Deterrence Force that controls eastern Tripoli and its international airport. Six cabinet ministers resigned amid anti-government protests, while eastern parliament speaker Aguila Saleh publicly demanded Dbeibah's removal “voluntarily or by force,” directly challenging the Government of National Unity's authority in western Libya.
Libya's planned auction of 22 oil blocks covering 235,267 square kilometres across the Sirte, Ghadames, and Murzuq Basins faces increased security risks from this political instability. The country remains divided between the Tripoli-based GNU and eastern government aligned with General Khalifa Haftar's Libyan National Army in Benghazi. Both sides maintain competing claims to oil revenue control under a fragile 2022 sharing agreement. The 444 Brigade reported discovering a mass grave with 10 bodies in territory previously controlled by al-Kikli's militia. Dbeibah's executive orders attempting to dismantle rival armed groups failed to neutralize the Special Deterrence Force, now Tripoli's dominant militia, following the fighting. UN mission UNSMIL confirmed establishment of a ceasefire committee, but no formal truce has been implemented, despite Defence Ministry statements claiming ongoing stabilization efforts.
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UK-EU Sign Defence Deal and Extend Fishing Access to 2038
The United Kingdom and the European Union have established new security and economic terms, giving UK firms access to the €150 billion EU defence procurement program, while EU fishing vessels retain rights in UK waters until 2038. The agreement eliminates agricultural border inspections through mutual food safety standards recognition and connects carbon markets. Starmer, von der Leyen, and Costa finalized terms at the first UK-EU summit since Brexit.
UK defence spending ranks second in Europe, allowing integration with EU military procurement without compromising sovereignty. The fishing agreement maintains the 25% quota reduction but extends access 12 years beyond the 2026 deadline. UK-EU trade figures show 21% export decline and 7% import reduction since separation. The deal creates a capped youth mobility program without full movement rights, exchanges biometric security data, and expands British e-gate access at EU airports. Both parties will establish UK participation in EU electricity markets and joint crisis response.
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EU Gas Storage Refill Costs Surge €10 Billion After Winter Depletion
Europe must spend €26 billion to refill gas storage to 90% capacity by November 2025, compared to €16 billion last year. The 2024-2025 winter, Europe's coldest since Russia's Ukraine invasion, depleted reserves to 30% by March—the lowest level in three years. Wind generation shortfalls throughout winter drove additional gas consumption, increasing depletion rates. The EU's annual gas import bill reached €100 billion in 2024, with procurement costs expected to rise 10% this summer as filling operations intensify.
Europe needs 45% more LNG imports than in 2024 to meet even reduced storage targets. Equinor, Europe's top gas supplier, states European buyers must outbid Asian competitors to secure necessary volumes. Though Brussels approved potential 7% reductions to the 90% storage target, implementation delays mean summer purchases proceed under existing mandates. European traders currently delay purchases anticipating price drops, creating late-summer vulnerability when Asian cooling demand typically peaks. U.S. LNG exports hit record volumes through early 2025 as European hub prices exceeded Asian spot rates. China's demand remains temporarily suppressed by economic slowdown, but recent Washington-Beijing trade détente could drive Chinese industrial consumption higher, intensifying competition for limited global LNG volumes during Europe's critical refilling period.
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Vietnam and Thailand Form Strategic Partnership
Vietnam and Thailand signed a Comprehensive Strategic Partnership on May 15, 2025, in Hanoi during Thai Prime Minister Paetongtarn Shinawatra's first visit to Vietnam since 2014. The countries will integrate supply chains across agriculture, petrochemicals, machinery, electronics, and logistics to boost bilateral trade from $20 billion to $25 billion by 2030. Both nations face imminent economic damage from U.S. tariffs of 46% on Vietnam and 36% on Thailand scheduled for July 2025, directly threatening their combined $169.1 billion trade surplus with the United States.
The two largest mainland Southeast Asian economies are hedging against U.S. market dependency by building regional economic bulwarks. Vietnam, with $123.5 billion in U.S. trade surplus, and Thailand, with $45.6 billion, lack sufficient domestic markets to absorb potential export losses from American protectionism. Vietnam has rapidly constructed a defensive diplomatic network, forming similar partnerships with Singapore, Indonesia, New Zealand, and Malaysia within six months. The agreement commits both nations to defence cooperation and aligned positions on South China Sea disputes with China. Their “Three Connects” strategy targets complementary production sectors where Thailand ranks as Vietnam's ninth-largest trade partner and Vietnam serves as Thailand's sixth-largest export destination, creating immediate economic synergies against external market disruption.