In Geopolitics Today: Tuesday, October 18th
Australia Reverses Recognition of West Jerusalem as Israeli Capital, Thailand and Vietnam Turn to Coal for Energy Generation, and other stories.
Australia Reverses Recognition of West Jerusalem as Israeli Capital
The Australian government no longer recognises West Jerusalem as the capital of Israel, reversing a policy adopted by former prime minister Scott Morrison’s government. Canberra had previously indicated it would recognise West Jerusalem as Israel’s capital, yet in recent days references of this recognition have been removed from government websites.
In effect, Australia has quietly dropped its prior recognition, with Foreign Minister Penny Wong stating that Australia’s embassy would remain in Tel Aviv until a two-state solution “in which Israel and a future Palestinian state coexist, in peace and security, within internationally recognised borders” can be achieved. Israel regards the entire city, including the eastern sector it annexed after the 1967 Middle East war, as its capital, while Palestinian officials want occupied East Jerusalem as the capital of a future Palestinian state they hope to establish in the occupied West Bank and the Gaza Strip.
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Iran to Deliver More Missiles and Drones to Russia
Iran has reportedly promised to provide Russia with surface-to-surface missiles and more drone systems. A deal is said to have been agreed earlier this month when senior Iranian officials visited Moscow for talks with Russia. The transfer of more arms between Iran and Moscow threatens Ukrainian-Iranian ties and may draw more sanctions from Brussels, London and Washington.
Russia is finding it more difficult to produce weaponry for itself given the sanctions on its industrial sector and so was turning to imports from partners like Iran and North Korea. This in turn has allowed Moscow to field the relatively cheap but very effective strike drones, utilizing them to great effect to conduct strikes across Ukraine. A spate of Russian attacks using Iranian-made Shahed-136 drones have already seriously damaged Ukrainian energy infrastructure in recent weeks as Iranian drones have proved difficult to counter with traditional anti-air systems.
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Thailand and Vietnam Turn to Coal for Energy Generation
Both Thailand and Vietnam have in the past committed to drastic emissions reductions as part of international climate summits. Yet today, as a severe energy crisis grips the world, both powers look set to lean more heavily into coal for their power needs.
Thailand is already moving toward adding four new coal-fired power generators to its grid. The Thai government has already approved the first two plants, scheduled to begin construction this year and operate from 2026 to 2050. These power plants will form part of a series of coal-powered generators in the Mae Moh power plant. Similarly, Vietnam’s government announced last month that it will increase coal imports for the next 13 years. In a new strategy to develop the coal sector, Vietnam’s Ministry of Industry and Trade has stated that it will increase annual coal imports to as much as 83 million tons during 2025-35.
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Qatar’s Limited Ability to Divert LNG Exports to Europe Going Forward
Qatar's Minister of Energy Saad Sherida al-Kaabi has warned that Europe will face a more significant energy crisis during the 2023-2024 winter. While European natural gas storage levels may be enough to survive the coming winter, when its natural gas storage is depleted and Russian natural gas exports do not resume, Qatar will be unable to divert further supplies toward European customers.
Europe is likely to avoid natural gas shortages during the coming winter due to high storage levels, but gas reserves are expected to be depleted by spring. If Russian natural gas supplies are not resumed, another wave of financial distress in the energy sector would be sure to follow, forcing European governments to step in. The global liquefied natural gas market is expected to remain tight in the years ahead as there is little new LNG export capacity coming online in the near-term. This lack of capacity will also exacerbate any short-term outages, particularly during the winter.