In Geopolitics Today: Thursday, June 5th
UK Signs £20 Billion Decade-Long Norwegian Gas Contract, Ukraine Reverses Balkan Pipeline to Import European Gas, and other stories.
ISKP Relocates Operations to Pakistani Territory
Islamic State Khorasan Province operates training camps in Pakistan's Balochistan province following Taliban operations that eliminated its Afghan territorial control in 2021. ISKP maintains bases in Mastung district's mountainous terrain where Pakistani government authority remains absent, exploiting 2,430 kilometres of porous border terrain unsuitable for effective monitoring. Balochistan Liberation Army killed 30 ISKP fighters during March raids on camps housing international militants from Turkey, India, Uzbekistan and Tajikistan. The group's cross-border sanctuary provides operational depth beyond Taliban reach, while Pakistan struggles to control remote frontier regions lacking road infrastructure or permanent security presence.
ISKP's Pakistani bases threaten regional stability across territory controlling critical China-Pakistan Economic Corridor routes linking Gwadar port to Central Asian markets worth $87 billion in annual trade flows. Pakistan faces dual insurgency pressures from secular Baloch separatists and Islamic State militants across provinces containing 44% of national territory but generating 3% of GDP. The group's presence complicates US-Pakistan counterterrorism cooperation, while China demands corridor security for Belt and Road investments totalling $25 billion in Balochistan infrastructure projects. Taliban Afghanistan loses direct action capabilities against ISKP sanctuaries across international borders, requiring Pakistani military operations that Islamabad lacks resources to sustain across 347,000 square kilometres of mountainous desert terrain vulnerable to militant infiltration from Afghan bases.
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Russia Industrializes Drone Production for Strategic Bombardment
Russia operates domestic Shahed drone factories producing hundreds of units monthly at $20,000 per drone compared to $100,000+ Ukrainian interceptor costs. Russian modifications include carbon radar-absorbing coatings, cellular communications for battlefield data transmission, and incendiary warheads maximising infrastructure damage per strike. Decoy drones comprise 40% of attack formations, forcing Ukrainian air defences to engage phantom targets while depleting interceptor stockpiles faster than Western resupply rates. Production facilities operate beyond Ukrainian strike range while generating exportable technology for allied states seeking asymmetric warfare capabilities against NATO-standard air defence systems.
Ukraine's 603,000 square kilometre territory requires hundreds of mobile air defence platforms protecting urban centres, while frontline forces demand anti-aircraft coverage against Russian aviation. Moscow exploits Ukrainian dependence on Western interceptor deliveries that arrive irregularly, while Russian production operates continuously from secure facilities. Drone attrition warfare forces NATO allies to increase interceptor production and ammunition stockpiles for collective defence scenarios, while revealing limitations of Western air defence sustainability during prolonged conflicts. Russia positions itself as drone technology competitor to Turkey and China in global markets worth $12 billion annually, offering battle-tested systems demonstrated against NATO-supplied Ukrainian air defences to potential customers across Africa, Asia and Latin America.
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UK Signs £20 Billion Decade-Long Norwegian Gas Contract
Centrica contracted 5 billion cubic metres annually from Norway's Equinor through 2035, covering 9% of UK gas demand at £20 billion total cost. The agreement halves crisis-era purchases but matches pre-2022 volumes as the UK imported £10.4 billion of gas in 2024 while terminating North Sea exploration licences. Norway supplies over 50% of UK gas imports through subsea pipelines as domestic production declines and government policy blocks new drilling permits. UK gas storage provides under one week of supply compared to months available across continental Europe, forcing dependence on just-in-time deliveries vulnerable to pipeline disruptions or Norwegian supply curtailments.
The UK is transitioning from energy exporter to import-dependent consumer while maintaining 27 million homes reliant on gas heating systems, requiring Norwegian supply guarantees. Norway's state energy monopoly gains decade-long revenue certainty worth $2 billion annually, while the UK accepts supply vulnerability during European energy crises that affect heating costs for 85% of households. Centrica operates North Sea storage infrastructure, requiring government subsidies to maintain operations as reserves decline below strategic minimums during winter heating seasons. The contract includes hydrogen substitution provisions dependent on market development currently limited to demonstration projects, highlighting UK reliance on fossil fuel imports despite commitments requiring heat pump installation across residential housing stock designed for gas heating systems.
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France Secures Southeast Asia Defence Manufacturing Hub
Indonesia committed to local production of 42 Rafale fighter jets with options for 18 additional aircraft, two Scorpene submarines and 13 Thales radar systems during Macron's regional tour, securing $10.25 billion in defence contracts. French contractors gained access to Indonesia's 280-million-person market through technology transfer agreements establishing fighter jet assembly lines and submarine shipbuilding facilities. Vietnam purchased 20 Airbus aircraft and French satellite surveillance systems, while Singapore elevated bilateral ties to comprehensive strategic partnership status. TotalEnergies secured solar development rights in Riau province as French companies positioned for Southeast Asia's $400 billion infrastructure modernisation requiring European technology partnerships.
Indonesia's defence localisation requirements create multi-decade French industrial presence competing with Chinese and Russian military exports across ASEAN markets worth $50 billion annually in defence spending. France leverages Pacific territories in New Caledonia and French Polynesia to establish regional supply chains inaccessible to landlocked European competitors, while providing naval access to Southeast Asian waters. Vietnamese South China Sea territorial disputes drive demand for independent surveillance capabilities, reducing dependence on US or Chinese intelligence systems. Southeast Asian states use French partnerships to maintain strategic autonomy between competing superpowers while France gains manufacturing footholds in markets generating 6% annual GDP growth rates requiring advanced defence technologies for territorial security and maritime domain awareness across 4.5 million square kilometres of ocean territory.
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Ukraine Reverses Balkan Pipeline to Import European Gas
Ukraine activated the Trans-Balkan pipeline on 4 June 2025, importing 1 billion cubic metres annually from Greece's Revithoussa LNG terminal and Azerbaijani supplies via Trans Adriatic Pipeline. The reversed infrastructure previously carried Russian gas southward but now transports European supplies northward through Greece, Bulgaria, Romania and Moldova with tariffs discounted 46% below standard rates. Five national transmission operators coordinate flows replacing Russian transit agreements terminated in December 2024 that previously moved 40 billion cubic metres annually to European markets. Initial June imports target 100 million cubic metres, scaling to full capacity before winter 2025-26 heating season.
Russia increased TurkStream exports 10% to 46 million cubic metres daily compensating for lost Ukrainian transit revenues while Europe reduces Russian gas dependence through diversified supply corridors. The pipeline connects Mediterranean LNG infrastructure with southeastern European transmission networks, providing Ukraine access to global gas markets independent of Russian territory. Ukraine maintains energy security during ongoing conflict while European allies establish alternative supply routes reducing Moscow's energy leverage over continental heating systems. Capacity auctions demonstrate commercial viability across the five-country transmission system as Europe transitions from Russian pipeline gas to LNG imports requiring expanded terminal infrastructure and storage facilities protecting against supply disruptions during winter heating periods affecting 500 million European consumers.
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Israel Hits Record $14.8 Billion Arms Sales
Israel has achieved a record $14.8 billion arms exports in 2024, growing 13% from $13.1 billion in 2023 and doubling 2019 sales of $7.3 billion. European states bought $8 billion in Israeli weapons — 54% of total exports versus 35% in 2023 — while Arab states purchased $1.8 billion, representing 12% of sales. Asian purchases dropped from $6.3 billion to $3.4 billion following completion of major India and Azerbaijan contracts. Air defence systems and missiles comprised 48% of exports, while vehicles, radar, and aircraft each accounted for 8-9% of sales.
Israel markets Gaza war experience to demonstrate weapons effectiveness, while European defence budgets are quickly rising. Spain cancelled $327 million Rafael contract for anti-tank systems as European political opposition to Israeli arms sales grows. Israeli officials report declining UK and French sales due to Gaza war imagery affecting political decisions, despite military demand for proven systems. Arms exports represent 10% of Israel's total exports, creating economic dependence on sustained conflict demonstration of weapons capabilities. Abraham Accords arms sales normalize military cooperation with former Arab adversaries, while Asian market contraction reflects US weapons preferences prioritizing bilateral defence relationships.