In Geopolitics Today: Wednesday, December 20th
Red Sea Shipping Coalition Rapidly Expands Under the Radar, Russia Seizes Austrian and German Energy Assets, and other stories.
Russia Achieves Symbolic LNG Milestone
With the first cargo shipped from its sanction-hit Arctic LNG-2 project, Russia has logged a symbolic victory in defying Western economic pressure. But enduing strategic gains for Moscow's global gas ambitions remain uncertain given technical and logistical headwinds.
Led by state firm Novatek, the $22 billion Arctic plant was designed to expand Russia's liquefied natural gas (LNG) reach. However, exodus of foreign partners has left production dependent on unproven domestic technology. More crucially, new US sanctions directly impede the logistics infrastructure planned to deliver cargoes from this remote region to premium Asia-Pacific markets. While the first train is now operational, likely at 50% capacity, reaching full commercial potential requires resolving transport bottlenecks that could prove just as challenging. Still, developing key Arctic terrain does furnish economic-military synergies on Russia's strategic frontier.
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Red Sea Shipping Coalition Rapidly Expands Under the Radar
The Red Sea Maritime Coalition formed to protect shipping from Houthi rebel attacks is much larger than originally announced. US Defense Secretary Lloyd Austin introduced 9 founding members, but a senior official has now revealed the coalition totals 19 members, with 10 states asking to remain unnamed.
The expanded membership underscores the stakes in securing this vital trade route. Over 10% of world trade passes through the Red Sea, including key energy shipments. As major shipping firms reroute vessels around Africa, adding cost and delays, participation from European and Middle East militaries will bolster deterrence against further Houthi attacks. However, with the Houthis threatening reprisal attacks, it remains uncertain if the coalition’s show of force can prevent further disruptions without kinetic action.
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EU Strikes Restrictive Asylum Deal to Deter Migration Flows
The EU has struck a tentative political agreement to overhaul its asylum system after 7 years of contentious negotiations. The deal establishes a common EU framework for processing asylum applications, clarifying member state responsibilities from screening through removals.
The pact requires faster processing at external borders, allowing detention of certain applicants. It also empowers frontline states to deport more rejected asylum seekers. Financial burden sharing remains voluntary, not mandatory. While a compromise, the agreement signals a unified EU policy to deter irregular migration through restrictive measures, aligning with more conservative member state priorities. This could strengthen cooperation with migrant origin and transit countries on tightened borders and removals. However, by resisting mandatory relocation quotas, tensions may persist on sharing the costs and social pressures of migration.
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NATO Allies Expand Ukraine Support Amid Own Military Deficits
The UK and Germany are expanding military support for Ukraine despite the fact both powers have depleted weapons stockpiles, recruitment crises, and looming budget shortfalls. The UK is signing a naval pact with Ukraine while sending weapons that leave their forces lacking adequate supplies. Germany on the other hand aims to send heavy tanks and more arms, though its army lacks manpower and readiness.
The deepening allied commitments to Ukraine and Taiwan contrast with fundamental cracks in NATO's combat strength and sustainability. Stockpile and manpower deficits across key member states undermine deterrence credibility. Unless addressed, the disconnect between expansive alliance obligations and narrowing national military capacities risks emboldening rivals. The state of NATO defences therefore warrants much more urgent attention. Wider conflicts would quickly expose NATO's diminished war fighting resilience despite years of unchecked spending growth.
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ASEAN Exercises Spotlight Slow Security Shift and Regional Splits
In September 2023, ASEAN held its first joint military exercise involving all 10 member states. The drills aimed to showcase regional cohesion amid growing great power competition between China and the US for influence in Southeast Asia. However, the location was moved to avoid Chinese-claimed waters, underscoring how ASEAN still seeks to build consensus rather than directly address regional security issues.
While a milestone for an organization long averse to defence matters, the exercise highlighted the bloc's continued vulnerabilities. China and the US are actively courting Southeast Asian nations through economic and security ties bilaterally. As consensus-based ASEAN fails to constrain assertive neighbours or counter widening external pressures, its central convening authority risks decline. This is most evident from the grouping’s inability to operationalize cooperation on divisive regional issues like the South China Sea. But internal splits and bandwagoning may persist across the region, as non-alignment carries growing risks. Unless it achieves firmer joint positions, ASEAN’s relevance to regional affairs will progressively cede ground to ascendant powers.
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Russia Seizes Austrian and German Energy Assets
Russian President Vladimir Putin has ordered the seizure of assets held by Austrian firm OMV and German firm Wintershall Dea in Russia, including stakes in major natural gas projects. The move signals an aggressive retaliation against Western sanctions targeting Russia's energy industry. OMV and Wintershall Dea confirmed the nationalization of their Russian assets, with significant production losses.
While confrontational, Moscow's asset seizures can be seen as proportional countermeasures after hundreds of billions in Russian state funds were frozen abroad. With pressure mounting in Europe to fund Ukraine's war effort directly with seized Russian money, the Kremlin is moving to secure domestic energy assets and revenue streams preemptively. The forced privatizations rupture Putin's remaining corporate relationships in Germany and Austria, further alienating future compromise. Nonetheless, the West still retains over $300 billion of immobilized Russian assets even as economic battles slowly intensify.