Weekly Debrief: Ukraine Enters Russia, New Geopolitical Risks, And More
Weekly Debrief: Ukraine Enters Russia, New Geopolitical Risks, And More
Across Europe, alarm bells are ringing
This week, Mr. Geopolitics went from the war in Europe to the race riots in the UK to the effect of a global recession on geopolitics. One of the most shocking insights was this:
Ukraine has entered Russia, and now controls over 500 square kilometers of land. This is the first time a foreign power has entered Russia in 80 years. The last time this happened was during World War II.
(From the insight “Ukraine Exposes Russia”)
Below is a debrief of Mr. Geopolitics over the past week.
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August 5, 2024 | Mr. Geopolitics
Energy Breaks The EU (Subscriber Exclusive)
“However, as Europe bounces back from one energy crisis, another energy crisis threatens to begin, potentially snowballing into an “energy war,” that could break the EU in irreversible ways.
In June, Kyiv banned Lukoil, a Russian energy giant, from using Ukraine as a transit hub, to export oil to Europe. Lukoil was using the Druzhba pipeline, also referred to as the “Friendship Pipeline.” For Ukraine, the ban on Lukoil was aimed at cutting Russian energy revenue.
Except, Ukraine’s action put Hungary and Slovakia, immediate neighbors of Ukraine, in emergency mode. In particular, Hungary depends on Lukoil for almost 50% of its Russian energy imports. According to one analysis, from June, without Lukoil’s energy, Hungary could face electricity shortages “within weeks.” And, it won’t be until 2025 that Hungary can begin replacing large chunks of Russian oil imports with alternatives.”
August 6, 2024 | Mr. Geopolitics
Recession Creates New Geopolitical Risks (Subscriber Exclusive)
“What makes the situation even more dangerous, for economy and geopolitics, is that a future recession may not have just one starting point, but multiple. While Monday’s drop was due to US recession fears, centered around the lackluster US jobs report for July, where the US economy added just 114,000 jobs, missing projections by big margins (a Dow survey had projected 185,000 jobs), there are other economic strains too, such as:
Consumer spending across the globe is quickly slowing down
Previous sources of growth, like China, face serious headwinds
A growing round of tech-layoffs threatens to create a new “dot com bubble”
Interest rate hikes have not brought inflation to pre-pandemic levels
Global trade continues to slow, in part, because of geopolitics (i.e. Red Sea)
Whether or not the world is in the first pangs of recession, it is becoming clear that resiliency in the global economy is almost gone. After years of shocks, economies across the world have become incredibly fragile (and fatigued). The slightest gust of wind could cause some to topple. And, when (not if) economic turmoil strikes and spreads, the world of geopolitics could be destabilized, as existing flashpoints are amplified or new ones are created out of the blue. It could be akin to oil tankers ramming into wildfires.”
August 7, 2024 | Mr. Geopolitics
UK Faces Geopolitical Turmoil (Subscriber Exclusive)
“The catalyst for the outburst of anti-immigrant and anti-Muslim sentiment was the Southport stabbing. Except, even with the real facts, that the attacker was born in the UK, and practices Christianity, not Islam, the protests are still occurring and growing. And, a new poll, published by YouGov, a British research company, found that a third of respondents (British nationals) support the ongoing anti-immigrant protests.
What is taking place in the UK is not an isolated, temporary outburst of anger. It is a permanent shift, with consequences for the UK, the West, and the whole world.”
August 8, 2024 | Mr. Geopolitics
Serbia’s Risky Romance (Subscriber Exclusive)
“During his stopover in Belgrade, both sides elevated their relationship to new heights, signing a new framework for cooperation, referred to as a “shared future.” And, it was on the back of the framework, that China and Serbia inked a new trade deal, removing tariffs on 95% of Serbian exports to China, within the next 5 to 10 years. The significance of the trade deal was missed by most, but not the Serbian president Aleksandar Vučić, who described the trade deal as “guaranteeing a future for Serbia.”
For Serbia, the road to growth and development does not pass through Brussels, but Beijing. Serbia was pegging its future to China, repositioning itself around the world’s second largest economy, while many others, including the EU, were distancing themselves from Beijing.
Or, at least this is what it seemed like Serbia was doing.”
August 9, 2024 | Mr. Geopolitics
Ukraine Exposes Russia (Subscriber Exclusive)
First, Ukraine has further decimated Russia’s optics. Already, the Ukraine war has made many question the true effectiveness of Russian military forces, considering Russia is ranked as the world’s second most powerful military, while Ukraine, prior to the war, was ranked 55. Now, Putin is being forced to call “reserve troops” to roll back Ukrainian forces in Kursk, raising big red flags about Russia’s overall military readiness and border security.
Second, Ukraine is making it clear to Russia that it is preparing to take the war “deep” into Russia itself, supported not just by Ukrainian troops penetrating Russia’s borders, but also, through the recently delivered F-16s, coupled with the West allowing Kyiv to strike Russia with advanced long-range weaponry and the billions Ukraine is receiving from frozen Russian assets (starting with accumulated interest being transferred into Ukraine’s coffers).
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