In Geopolitics Today: Wednesday, January 8th
Turkey Threatens Military Action Against Kurdish Forces in Syria, Major Shipping Registries Back Global Carbon Tax, and other stories.
Turkey Threatens Military Action Against Kurdish Forces in Syria
Turkish Foreign Minister Hakan Fidan has threatened military action against Kurdish forces in Syria, demanding international fighters leave and YPG forces integrate into Syria's new national system. Turkish-backed factions have resumed conflict with Kurdish forces in northern Syria since the rebel offensive that ousted Assad. The demands reflect Turkey's position that the YPG is linked to the PKK (Kurdistan Workers' Party), designated as a terrorist organization by Turkey, the US, and EU.
Turkey is leveraging Syria's power vacuum to eliminate perceived threats on its border. While al-Sharaa's Hayat Tahrir al-Sham group supports integrating Kurdish forces into the national army, Fidan's references to previous operations in Afrin, Ras al-Ain, and Tal Abyad signal Ankara will act unilaterally despite US support for the YPG. The rapid transition in Damascus has created an opportunity for Turkey to reshape northern Syria's security landscape according to its interests.
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UAE and Oman Challenge Oil Benchmark Status Quo
Middle Eastern oil producers are expanding their trading infrastructure, with the UAE and Oman developing local exchanges to increase their market influence. The Abu Dhabi exchange could support the UAE's potential independence from OPEC as it plans to boost production capacity from 4.5 to 5 million barrels daily over three years, diverging from Saudi Arabia's supply restriction strategy. Meanwhile, Saudi Arabia's Tadawul has acquired nearly one-third of Oman's DME exchange, though it won't trade Saudi crude there to avoid conflicts of interest.
The push for regional oil benchmarks reflects broader power shifts in global energy markets. Gulf producers aim to capture more value from their exports by controlling price-setting mechanisms, traditionally dominated by Western exchanges. The UAE's moves align with its wider strategy of asserting independence from Saudi-led OPEC policies, while Oman positions itself as a neutral trading hub between rival powers. However, creating a viable regional benchmark requires resolving deep-rooted issues: limited storage infrastructure, regulatory differences between Gulf states, and the political challenge of coordinating between Iran and Arab producers. These hurdles explain why Middle Eastern crude remains priced against Asian and European benchmarks despite the region's dominant production role.
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Major Shipping Registries Back Global Carbon Tax
Liberia and Panama, which register 66 per cent of global shipping tonnage, have joined 43 other jurisdictions in backing a flat tax on maritime greenhouse gas emissions. The proposal submitted to the International Maritime Organization (IMO) last month marks a significant shift, uniting major shipping nations like Japan and Greece behind an emissions levy for the fossil fuel-dependent industry. However, key players including China, Brazil, and the US remain opposed, favouring alternative approaches like emissions trading.
The emerging divide between registry states and major trading nations exposes fundamental tensions in maritime regulation. Registry nations like Liberia and Panama, despite their outsized role in maritime governance, risk losing business if fees become too punitive, explaining Liberia's low proposed rate of $18.75 compared to the Marshall Islands' $150. Meanwhile, China, Brazil, and the US's preference for emissions trading reflects their broader strategy of maintaining control over their shipping costs and carbon policies. The conflict highlights how IMO decisions increasingly pit traditional maritime powers against rising trading nations, while vessel owners retain the ability to switch jurisdictions to avoid stricter regulations — a dynamic that has historically undermined attempts at global shipping reform.
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Chinese Infrastructure Reshapes Pakistan
China's flagship Belt and Road project in Pakistan has delivered significant infrastructure and energy gains, with $25 billion of completed projects out of a $62 billion portfolio. The China-Pakistan Economic Corridor (CPEC) has built over 800 kilometres of highways and added 17,000 megawatts of power capacity, while trade through the corridor more than tripled from $4.8 billion in 2015 to $16 billion in 2023. The initiative has created 200,000 jobs and reduced electricity shortages by 35% in provinces like Baluchistan and Khyber Pakhtunkhwa.
CPEC represents China's most comprehensive attempt to transform a partner economy through infrastructure investment, yet faces mounting challenges. Pakistan's chronic balance of payments crisis and rising debt burden raise questions about its ability to service Chinese loans, while security threats to Chinese workers persist in volatile regions. The project's emphasis on coal power plants conflicts with global climate goals, potentially limiting future funding. Moreover, India's opposition to CPEC projects in disputed Kashmir territories complicates regional integration efforts, while US-China competition adds another layer of geopolitical pressure on Pakistan's most important economic partnership.
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Paraguay-Venezuela Break Deepens South American Divide
Paraguay has broken diplomatic ties with Venezuela after recognizing opposition candidate Edmundo González Urrutia as winner of the July 2024 elections. President Santiago Peña ordered Venezuelan diplomats to leave Asunción within 48 hours, prompting Venezuela's Foreign Minister Yván Gil to demand the same from Paraguayan officials. The break comes just months after the two countries had restored relations in September 2023, ending a previous rupture that began in 2019.
The diplomatic crisis reflects South America's deepening political realignment. Paraguay's position as a key US ally contrasts with the recent shift by regional powers Brazil and Colombia toward engagement with Caracas. This split among South American nations mirrors broader divisions over US influence in the region, with Paraguay, Uruguay, and Ecuador maintaining strong US ties while Argentina, Bolivia, and Venezuela pursue more independent policies. The rupture also highlights Venezuela's continued isolation from US-aligned states, despite attempts by Brazil's Lula to broker regional reconciliation and reintegrate Maduro's government into regional bodies like Mercosur.
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India Expands Naval Presence Across Africa
India's naval deployments in Africa have expanded significantly in 2024, with vessels like INS Sunayna, INS Talwar, and INS Gharial conducting missions across the region. These operations, part of India's SAGAR (Security and Growth for All in the Region) policy, include professional exchanges with African navies, joint exercises, and technology transfers such as Fast Interceptor Crafts to Mozambique. The Indian Navy has also established radar networks in Mauritius and Seychelles to enhance maritime surveillance, while INS Sumedha provided humanitarian aid to Kenya following Cyclone Hidaya's devastating floods.
India's maritime push in Africa represents a strategic counter to China's continental dominance through the Belt and Road Initiative. While China has secured influence through infrastructure loans and construction projects, India leverages its naval capabilities and historical Indian Ocean ties to build security partnerships. The approach targets key maritime choke points and emerging energy producers, particularly in East Africa, where Chinese naval bases in Djibouti and rumoured facilities in Tanzania have raised Indian concerns. However, India's stretched diplomatic resources and delayed Africa summit reflect the challenges of sustaining engagement across the continent, even as its naval presence grows.