In Geopolitics Today - Wednesday, May 4th
EU to Increase Military Support to Moldova, UK to Assume Direct Rule Over Virgin Isles, Rising Oil Prices Undermine Russia Sanctions
EU to Increase Military Support to Moldova
The European Union has announced an expansion of defence assistance to Moldova. Several explosions in the region of Transnistria have raised concerns that the war in neighbouring Ukraine could spread to Moldova. Speaking in Moldova, the President of the European Council, Charles Michel, outlined plans which would ease these fears by promising to significantly increase the extent to which the EU provides military support to Moldova. In particular, Michel said the EU will step up the transfer of equipment and expertise in the fields of logistics and cyberdefence as a way to improve Moldova's “military-building capacities.”
Moldova's leadership has said that “forces in favour of war” were principally responsible for the attacks which took place in Transnistria last week. While she stated that Moldova does not see any “imminent risk,” the attacks have nonetheless prompted the Moldovan government to prepare contingency plans for “worst-case scenarios.” After several explosions appeared to result from a targeted attack on Transnistria's military and information broadcasting facilities, Transnistrian authorities announced the highest level of readiness to the “terrorist threat.” These attacks have reminded Moldova's government of the dangers of the war in Ukraine, and of the increasing risks emanating from a potential spill-over of the conflict into Moldova's territory. The statement released following the meeting between Michel and officials from Moldova signals the growing fear that the use of Russian hard power may soon threaten Moldova's territorial integrity.
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UK to Assume Direct Rule Over British Virgin Islands
The United Kingdom is preparing to impose direct rule over the British Virgin Islands. The Prime Minister of the Caribbean territory has been arrested in Miami on allegations of drug running while a simultaneous inquiry has professed rampant corruption problems in the territory. After Andrew Fahie appeared before a US judge on charges of cocaine smuggling and money laundering, a commission led by Judge Sir Gary Hickinbottom published a report urging the UK to dissolve the elected government, suspend their constitution, and impose direct rule for a period of at least two years.
The Virgin Islands are divided between the UK, the US and the US territory of Puerto Rico. Although London already decides policies related to defence and foreign affairs, the arrest and effective ousting of Fahie will mean that Governor General John Rankin will now assume authority over domestic policies in the British Virgin Islands. Fahie was arrested by the US Drug Enforcement Agency in an operation which also saw the chief executive of the port authority of the British Virgin Islands and her sons also apprehended. The British Virgin Islands — officially designated as one of the UK's overseas territories — has enjoyed limited self-governance under a constitution drafted in 2007. Now, the UK will be imposing direct rule over the overseas territory, and appears set to constrain self-governance in the name of combatting corruption.
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Rising Oil Prices Undermine Russia Sanctions
As the European Union mulls sanctions on Russia's oil sector, it is difficult to foresee have such a move would work to hinder Moscow without also crippling global energy affordability. What follows a potential EU-wide ban on all Russian oil is likely to be a steep rise in oil prices for all global customers, with commodity prices likely to rise in value if faced with a serious reduction in supplies. Such a ban would likely raise global oil prices and, counterintuitively, could prove to have a marginal impact on Russia as the fall in the volume of exported oil is counterbalanced by rising prices per barrel of oil.
EU efforts to outright ban Russian oil have been supported by the United States, which has sought to source alternative supplies in a bid to prevent rising prices from mitigating the impacts of sanctions on Russia. However, these attempts have thus far failed to yield concrete results. Washington's approaches to Venezuela, Saudi Arabia, Qatar, the UAE, and Iran have all seen mixed results, with few major oil-producing countries expressing a willingness to drastically increase production. No deal has been reached with Venezuela, and Saudi Arabia appears more eager to coordinate with Russia via OPEC+ to ensure oil prices remain high. Qatar, which has signed a deal to deliver natural gas to Germany, has maintained that existing long-term liquefied natural gas contracts with Asia are inviolable. Any hopes of a production boost arising from a revived the nuclear deal with Iran appears to have stalled as well.
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