In Geopolitics Today: Thursday, November 17th
Ukraine Grain Export Deal Extended for Four Months, First New German LNG Terminal Comes Online, and other stories.
Ukraine Grain Export Deal Extended for Four Months
A deal to allow grain exports to continue from Ukraine’s and Russia’s Black Sea ports has been extended for a further four months. UN Secretary-General Antonio Guterres said that with the consent of Kiev and Moscow secured, the deal would continue for another 120 days.
Renewal of the initial agreement is essential to bring down the prices of food and fertiliser worldwide. Guterres and Turkish President Recep Tayyip Erdogan brokered the initial deal on July 22nd, and have been instrumental in mediating between Russia and Ukraine via discreet diplomacy.
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Iranian Drones Depend on Parts Produced by the US and its Allies
Studies of downed drones in Ukraine have revealed that the majority of the parts found in downed Iranian drones are reportedly manufactured in the United States, Europe, and other countries allied to the US, according to documents obtained by the Wall Street Journal.
The revelation puts a spotlight on Iran's success at building up a potent domestic arms industry using commercially available parts that can be obtained while evading US sanctions. Three-quarters of the component parts Iranian drones bought by Russia and downed in Ukraine are said to be produced in the US.
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Egypt Lowers Domestic Power Demand and Selling More Gas to Europe
The Egyptian government is working to limit domestic power consumption of natural gas in order to take advantage of high spot prices in Europe. Egypt’s natural gas infrastructure is being geared to reduce domestic power production in order to redirect flows of liquefied natural gas (LNG) to Europe.
Egypt is able to score a diplomatic victory in helping Europe diversify away from Russian natural gas. At the same time, Cairo receives foreign currency for its LNG exports and takes advantage of high energy prices. Egypt is looking to reduce the consumption of the domestic natural gas used for power generation by 15%, allowing Cairo to transmit this natural gas via LNG tankers send to Europe the gas it has saved domestically.
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First New German LNG Terminal Comes Online
Germany has inaugurated its first new floating storage regasification unit (FSRU), to be used for the import of liquified natural gas (LNG) at the northern port of Wilhelmshaven in Lower Saxony.
The new FSRU will become operational at the end of this year together with a second floating terminal at the Brunsbuettel North Sea port, which altogether are expected to add 5-7.5 billion cubic meters of annual regasification capacity to Germany. Another three FSRUs will follow in 2023, which will help Germany replace 50-60% of Russian gas through LNG that year.
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Chinese Arguments Against the Chips and Science Act
With the United States banning Chinese firms access to advanced semiconductors, China’s options appear limited in the short-term. The chip war is only beginning to heat up as both China and the United States prepare for whatever one may eventually throw at the other.
In response to the ban, China has mobilized a strategic communications campaign to undermine support for the Act. Beijing publicly argues that the Chips and Science Act (CHIPS) will backfire and hurt US companies, that the Act violates World Trade Organization rules, and that this broader shift by Washington toward protectionism will backfire and spur market growth within China.