In Geopolitics Today: Tuesday, July 26th
The EU Reaches Deal on Natural Gas Rationing, Iran is Benefitting from High Oil Prices, and other stories.
The EU Reaches Deal on Natural Gas Rationing
The European Commission Chief has announced that agreement was reached between EU governments for a bloc-wide reduction in natural gas consumption by 15%. The EU said the deal would be voluntary at first, though this would change to mandatory enforcement if natural gas supplies reach critically low levels.
While touted as a “decisive step” to withstand a winter without Russian natural gas supplies, some countries not connected to the EU's gas pipeline network, such as Ireland, Malta and Cyprus, would be exempt from any mandatory gas rationing. The Baltic nations, which are not connected to the European electricity grid and are reliant on natural gas for electricity production, are also exempt from compulsory targets. In addition, EU member states can also ask to be exempt if they exceed gas storage filling targets, if critical industries are threatened, or if their gas consumption has increased by at least 8% compared to their average consumption of the past five years.
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Egypt, Saudi Arabia and Turkey Interested in Joining BRICS
President of the BRICS International Forum Purnima Anand revealed that Egypt, Saudi Arabia and Turkey are interested in joining the bloc. Their potential candidacy is set to be discussed at the BRICS summit scheduled for next year in South Africa.
All three countries have reportedly shown an interest in joining BRICS and are preparing to apply for membership in the coming months. Of the three, Egypt is most likely to join the BRICS grouping, though significant roadblocks remain for all three potential candidates. The BRICS group is an independent international organization that works to encourage trade, political and cultural cooperation among member states, and is made up of Brazil, China, India, Russia and South Africa.
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Russia to Leave International Space Station After 2024
Russia has decided to leave the International Space Station (ISS) project after 2024. The announcement throws into question the future of the entire ISS project, other participating nations likely to struggle to keep it running without Russian parts and expertise. The country’s new space chief said that after the withdrawal Russia will focus on building its own orbiting outpost.
The space station has long been a symbol of cooperation in the post-Cold War international order and still serves as one of the last areas of cooperation between the Washington and Moscow. Russian officials have previously spoken of a desire to launch the country’s own space station and have expressed reservations about continuing the aging ISS project. However, so far Russia has made no visible effort to develop its own space station, and the task will be daunting given the sanctions limiting access to certain critical technologies.
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Iran is Benefitting from High Oil Prices
Iran has been a beneficiary of high oil prices. International crude oil prices have largely held near $100 per barrel in the weeks since sanctions on Russian oil exports disrupted global oil supplies. As a consequence, Iran saw a 580% increase in the country’s treasury income from of oil exports and condensates in the first four months of this year.
Overall, Iran's budget income jumped by 48% between March and July compared to the same period the previous year. The country has boosted oil production and found markets for its oil products in its main foreign market: China. Since the US re-imposed sanctions on the Islamic Republic's oil industry in 2018, China has been the main destination for Iranian crude oil exports. However this could change in the seemingly unlikely event that a new deal is reached between Iran and the US, with the flow of Iranian oil offering a potential increase of between 500,000 bpd and 1 million barrels per day to global markets.
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