In Geopolitics Today: Wednesday, May 31st
Sudan’s Army Quits Truce Talks Led by the US and Saudi Arabia, UAE Withdraws from US-Led Maritime Coalition, and other stories.
Sudan’s Army Quits Truce Talks Led by the US and Saudi Arabia
The Sudanese army has halted its participation in ceasefire talks brokered by the United States and Saudi Arabia, citing failure by paramilitary groups to uphold their commitments. The mediators have acknowledged violations by both sides but have refrained from imposing sanctions, hoping to keep the negotiations alive. The army accused the paramilitary Rapid Support Forces (RSF) of repeated truce violations and the failure to withdraw from hospitals and residential buildings as stipulated in the short-term ceasefire agreement.
Recent heavy artillery fire in northern Khartoum has escalated tensions despite the extension of a truce. As the violence persists, essential services in Sudan are collapsing, with water shortages, limited electricity, and a severe strain on healthcare facilities. Entire districts of Khartoum lack running water, hospitals in combat zones are non-functional, and over 25 million people, more than half the population, require aid. The UN has appealed for $2.6 billion in funding but has received only 13% of the required amount. With the situation worsening and the risk of a total civil war looming, urgent international action is needed to address the escalating conflict in Sudan.
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Financial Cooperation Deepens Between China and the UAE
The United Arab Emirates (UAE) Central Bank has pledged to expand cooperation with the Hong Kong Monetary Authority, further deepening the UAE's ties to China. The two central banks held a meeting in Abu Dhabi, where they agreed to form a joint working group and enhance cooperation on financial infrastructure, financial market connectivity, and virtual assets regulation.
This move reflects the growing relations between the UAE and China, as evidenced by recent developments such as China's purchase of liquefied natural gas from the UAE using the yuan, plans for expansion by the China International Capital Corporation in the UAE and Saudi Arabia, and various cooperation agreements in sectors like nuclear energy and logistics. Of particular significance is the discussion between the UAE Central Bank and Hong Kong regarding virtual assets, considering the UAE's establishment of the Virtual Assets Regulatory Authority in 2022 to regulate cryptocurrencies.
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Energy Cooperation Between China, Iran, Iraq, and Russia
China, Iran, Iraq, and Russia have been forging a series of significant cooperation agreements that are reshaping the global oil market order. Moscow recently signed ten new cooperation agreements with Iran in the oil sector alone, granting Russian firms access to Iranian oil and gas fields, while China finalized cooperation agreements after waiting for the dust to settle. Under the comprehensive Iran-China 25-Year Comprehensive Cooperation Agreement, China secures oil and gas prices from Iran at a significant discount, further fuelling its economic growth plans.
These alliances and agreements reflect China's grand vision of the “One Belt, One Road” initiative, which aims to establish the Middle East as a strategic source of energy to support its economic growth. Russia, with its existing control over oil and gas resources, seeks to maintain influence in the region and strengthen its partnership with China. Meanwhile, Iran and Iraq have solidified their ties, particularly in the energy sector, allowing Iran to evade sanctions by rebranding its oil as non-sanctioned Iraqi oil. As these cooperation agreements unfold, they will have far-reaching implications for global energy flows and pricing, shaping the dynamics of the oil market and redefining the geopolitical landscape in the Middle East.
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UAE Withdraws from US-Led Maritime Coalition
The United Arab Emirates (UAE) has recently announced its withdrawal from the United States-led maritime coalition, the Combined Maritime Forces (CMF). The UAE Ministry of Foreign Affairs stated that the decision was made as part of an ongoing assessment of effective security cooperation with all partners. The decision showcases the UAE's push to diversify its security partnerships and safeguard its security interests.
The UAE's withdrawal from the maritime coalition highlights their disappointment with the US's perceived failure to act as a reliable security guarantor in the region. This decision serves as a signal to Washington that the UAE is a confident and sovereign nation capable of independently choosing its partners. It also reflects the UAE's pushback against US demands to sever ties with Russia and China, as they seek to expand their partnerships and safeguard their security interests. The UAE's withdrawal from the CMF will have implications for US efforts to police commercial shipping in the region, and it underscores the evolving dynamics of power and influence in the Middle East. The US has reportedly not yet received formal notification of any plans to withdraw.
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Indian Firm Overcomes Sanctions Challenges to Ship Russian Oil
The tightening oversight by adherents to the US-led sanctions regime over the supply of Russian oil has led to changes in registry and the need for alternative certifications for ship operators like Gatik Ship Management. Gatik, a major carrier of Russian oil to India, has faced challenges as classification societies have withdrawn certification for many of its vessels. Lloyd's Register and the American Bureau of Shipping (ABS) has taken such action.
With shipowners and insurers adhering to sanctions prohibited from handling Russian crude unless sold at or below a $60 a barrel cap, Gatik's fleet of tankers has played a significant role in ensuring continued flows of Russian oil to India. The reflagging of vessels and the challenges faced by Gatik highlight the limitations of efforts by those adhering to sanctions to control the supply of Russian oil. Gatik has obtained certification from IRClass for many of its ships since mid-March. Indian firms now manage most of Gatik's ships.
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