In Geopolitics Today: Wednesday, January 18th
Venezuela Suspends Oil Exports, Senior Members of the Ukrainian Government Killed in Helicopter Crash, and other stories.
Venezuela Suspends Oil Exports
Venezuela’s state-run oil company, PDVSA, has suspended most of its crude oil exports for a review of the contractual terms in order to ensure there are no payment defaults. Since the imposition of U.S. sanctions on the trade in Venezuelan oil in 2019, PDVSA has had to use middlemen to market its oil, which has led to complications with payments.
The suspension comes just weeks after PDVSA restarted deliveries of oil to the United States after receiving permission from the U.S. government. Despite U.S. sanctions, Venezuela's oil industry remains a significant earner, with the government expecting income from oil exports to finance 65% of the state budget for this year. The contract review will affect both production and exports of crude oil in Venezuela, and is likely to affect the price of oil in global markets.
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Mild Winter Keeps European Natural Gas Prices Low
Europe's gas storage levels have risen to an unusually high level due to an unseasonably warm start to winter and gas-saving measures implemented by the European Union.
This has resulted in low demand for natural gas and has caused the Dutch Title Transfer Facility (TTF) to dip under 55 euros per megawatt hour in mid-January for the first time since late 2021. Additionally, new infrastructure such as the BalticPipe pipeline and liquefied natural gas import facilities have come online, boosting Europe’s access to natural gas. These high storage levels will help Europe withstand the rest of the season with low levels of Russian natural gas and reduce the risk of an energy crisis next winter.
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The UAE Hosts Regional Leaders
The United Arab Emirates (UAE) has hosted a summit in Abu Dhabi with regional leaders from Oman, Bahrain, Qatar, Jordan, and Egypt in an effort to boost cooperation between the countries.
The meeting, titled “Prosperity and Stability in the Region,” was led by UAE President Sheikh Mohammed bin Zayed Al Nahyan, and aimed at promoting neighbourly relations based on principles of non-interference and increased regional integration. The participation of Qatar in the meeting is a sign that relations have normalized between Doha and its Gulf neighbours following the end of the Gulf diplomatic crisis in 2021. However, Saudi Arabia and Kuwait did not attend the summit.
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Senior Members of the Ukrainian Government Killed in Helicopter Crash
A helicopter crash in Ukraine has killed 18 people including at least three senior members of the Ukrainian government, and injured 29 more. The helicopter reportedly crashed into a kindergarten in Brovary, a suburb of Kiev.
The cause of the crash is not yet known, but it has been speculated that the crash was an accident due to low light conditions and foggy weather. The cause is currently being investigated by Ukrainian authorities and no fighting has been reported recently in the capital region. Whatever the outcome of the investigation, the death of these three prominent members of the government is a major blow to Ukraine, and may signal a shift in the country’s internal affairs going forward.
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Germany Seeks to Strengthen Relations with Ethiopia
The German government is attempting to regain influence in Ethiopia by renewing its relationship with the country after opposing it during the war in northern Ethiopia. German Foreign Minister Annalena Baerbock visited Ethiopia at the end of last week to pursue a rapprochement with the country.
Russia and China have bolstered their respective bilateral relationships with Ethiopia in recent years, supporting the country in the war against the regional government in Tigray, opposing pressure from the United States and European Union, and signing bilateral military cooperation agreements. Berlin is seeking better ties with Addis Ababa and using the judicial accountability for war crimes to exert pressure on the Ethiopian government. Germany is also using Ethiopia's grain shortage — caused primarily by a mix of drought, war, and sanctions — as an instrument to achieve a more positive relationship with Addis Ababa.