In Geopolitics Today: Tuesday, May 13th
US Signs $142 Billion Cooperation Deal with Saudi Arabia, Libya Oil Infrastructure Faces Renewed Armed Competition, and other stories.
US Signs $142 Billion Cooperation Deal with Saudi Arabia
The United States has signed $142 billion in agreements with Saudi Arabia during meetings in Riyadh on May 13, including advanced war fighting equipment and AI infrastructure investments. The package includes $14.2 billion in GE gas turbines, $4.8 billion in Boeing aircraft, and Saudi commitments for $20 billion in US AI data centres. Saudi Arabia is increasing investment targets toward $1 trillion as Crown Prince Mohammed bin Salman hosted American business leaders including Elon Musk for expanded economic partnerships. The agreements include ammunition production, training programs, and joint military cooperation frameworks.
The arms transfer eliminates traditional Israeli consultation requirements that previously restricted Arab weapons acquisitions. Israel appears to have lost its de facto veto over advanced US weapons sales to Arab states, a privilege it exercised since the 1970s through qualitative military edge guarantees. This represents a US strategy to secure massive investment and arms sales while ignoring Israeli security concerns about emerging regional military capabilities. Saudi Arabia gains access to systems previously reserved for Israel, including fifth-generation fighter aircraft and nuclear technology, potentially enabling uranium enrichment. The kingdom's enhanced military capabilities could shift regional balances, with Israel potentially losing its technological advantage over Arab neighbours. Iran's nuclear negotiations with the US further complicate the equation, as enhanced Saudi capabilities may represent US hedging against both Israeli intransigence and Iranian nuclear advancement.
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Libya Oil Infrastructure Faces Renewed Armed Competition
SSA militia commander Abdul Ghani al-Kikli was assassinated on May 12, triggering immediate clashes between armed factions controlling Libya's western oil infrastructure. Fighting erupted between al-Kikli's SSA forces and the 444 Brigade from Misrata, deploying armoured vehicles through Tripoli neighbourhoods. The SSA operates as one of several militias controlling oil revenues under Prime Minister Dbeibah's western government.
Libya's oil infrastructure operates under pure militia control, making production targets entirely dependent on armed group cooperation rather than state institutions. Eastern commander Haftar controls 60% of oil fields and export terminals through his Libyan National Army, creating an independent revenue stream that funds his parallel state structure. Turkish and Western-backed militias manage Tripoli refineries and maritime access points, using oil revenues to maintain territorial control and purchase weapons. Russian-backed forces expand presence around eastern installations while establishing parallel administrative structures, creating an alternative governance system that bypasses Tripoli entirely. Oil revenues flow through competing patronage networks, with militias using energy sales to purchase weapons, maintain fighters, and expand territorial control.
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Vietnam Offers Major Trade Concessions to the United States
Vietnam's trade surplus with the US reached $123.5 billion in 2024, making it the second-largest source of American trade deficit after China. Vietnamese manufacturers assemble Chinese components for re-export to the US, while companies relocated production facilities from China to Vietnam to avoid tariffs. Following 46% US tariffs in April 2025, Vietnam immediately offered concessions, including zero tariffs on American products and F-16 fighter jet purchases. The country serves as a critical transshipment hub for Chinese goods seeking to bypass US trade restrictions.
Vietnam operates sophisticated transshipment networks integrating Chinese supply chains with US distribution channels. The country extracts fighter jets from Washington while receiving Chinese development finance, leveraging great power competition for dual benefits. F-16 purchases signal closer US defense ties as China expands South China Sea presence near Vietnamese territory. Vietnam's territorial disputes with China create mutual interests with America in containing Chinese expansion while avoiding explicit military alliance. Chinese investment flows continue through 45 recent agreements covering AI, infrastructure, and green energy. Vietnam's economic diplomacy maintains strategic flexibility as both powers compete for regional influence through military cooperation and economic partnerships.
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New Zealand Plans to Double Defence Spending
New Zealand unveiled plans in April 2025 to double defence spending to 2% of GDP over eight years, responding to Chinese naval exercises in the Tasman Sea. Chinese forces conducted live-fire drills with Type-055 cruisers between Australia and New Zealand in February 2025, highlighting the country's defence vulnerabilities. New Zealand operates 8,700 active personnel, two frigates, and no combat aircraft with limited anti-ship capabilities restricted to 34 km-range Penguin missiles. The country maintains the world's fifth-largest maritime zone but lacks long-range strike capabilities against surface vessels.
Chinese naval forces operated Type-055 cruisers carrying 112 vertical launch cells within New Zealand's vicinity, demonstrating missile capabilities exceeding 400 km range. New Zealand's current anti-ship systems reach only 34 km, requiring helicopter deployment that exposes aircraft to defensive systems. The country eliminated its air force fighter capability in 2001, leaving two frigates as primary surface combatants. New Zealand's defence budget averaged 1.26% of GDP from 2014-2024, resulting in limited procurement of modern weapons systems. The planned missile upgrade to 100-300 km range would partially close the capability gap but remains below Chinese naval systems' ranges. New Zealand's maritime domain spans 4.2 million square kilometres — among the world's largest — while its naval force consists of two frigates and six patrol vessels.
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Portugal Controls Vast Atlantic Territory Without Development
Portugal governs 1.7 million square kilometres of Atlantic Ocean territory, containing extensive fisheries, wind energy potential, and deep-sea mineral deposits. The country seeks UN approval to expand this zone to 2.15 million square kilometres. However, Portugal operates minimal commercial infrastructure within its existing waters, with foreign institutions conducting most marine research and resource extraction activities. British and Norwegian companies dominate offshore renewable projects in Portuguese waters.
Portugal's Atlantic domain represents Europe's greatest untapped maritime resource yet lacks industrial capacity for exploitation. While Norway extracts billions from North Sea energy, Portugal maintains symbolic sovereignty without development. Foreign companies operate floating wind farms in Portuguese waters using technology Portugal doesn't possess. International research vessels map Portuguese seabed using local permissions but foreign funding. Portugal's industrial base cannot support major offshore projects, requiring foreign partners while capturing minimal value. Planned territorial expansion adds 450,000 square kilometres without addressing capacity gaps preventing exploitation of existing zones. Portugal risks becoming caretaker for foreign Atlantic resource extraction, maintaining legal jurisdiction while others extract economic value.
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Azerbaijan Finalizes Green Energy Export Route
Azerbaijan, Turkey, Bulgaria, and Georgia signed an electricity transmission agreement last month, establishing infrastructure to export Azerbaijani renewable energy to European markets. The memorandum builds on existing gas pipeline networks including TurkStream and the Southern Gas Corridor, adding parallel electricity transmission capacity. Azerbaijan positions itself as the primary renewable energy exporter, utilizing Georgia and Turkey as transit states to reach Bulgarian grid connections into European networks.
The green energy corridor promises to reshape European energy dependency beyond Russian control. Azerbaijan leverages fossil fuel infrastructure experience to become a renewable hub, using gas pipeline agreements as electricity transmission templates. Turkey controls both gas flows and green electricity to Europe while developing domestic renewable capacity. Bulgaria's €857 million Greenabler project upgrading 720 kilometres of transmission lines positions it as a renewable energy storage rather than fossil fuel transit state. The corridor enables Azerbaijan to bypass Russia entirely, offering Europe alternative energy sources avoiding Moscow-controlled infrastructure. The disputed Zangezur corridor through Armenia could provide direct European access, though Armenian opposition creates strategic uncertainty.