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Rapid-Fire Friday: Geopolitics Issue

Rapid-Fire Friday: Geopolitics Issue

March 11, 2023 • Time to Enlightenment...7 minutes

Good morning.

A rapid-fire roundup of some of the big geopolitical issues today: Tunisia, the Turkey / Syria earthquake, Russian sanctions, the Nigerian Election, and Israel-Palestine.

The Cyprus election run-off is this weekend and America will be watching a football game while eating a record number of nachos and wings.

See you on Monday!

Tunisia

There have been no steps to address the lack of a decisive outcome in the election runoff that took place two weeks ago despite protests and complaints that the government of President Saied is illegitimate. Instead, the President has sanctioned a crackdown on the opposition, increasing the number arrested or charged with frivolous offenses and is describing the opposition on the terms of a “cancer” on the country.

Tunisian president Kais Saied has caused uproar after he described opposition figures as a “cancer” that can only be “cured with chemicals” in a public address this week.

“The state is ravaged by corruption – but the Tunisian people will cleanse its institutions of the cancer that has spread through the country,”

President Saied quoted in The New Arab

Sanctions on Russia

The Western sanctions against Russia following the invasion of Ukraine have not had such a big effect on oil and gas revenues as hoped.

For all of 2022, Russia managed to increase its oil output 2 percent and boost oil export earnings 20 percent, to $218 billion, according to estimates from the Russian government and the International Energy Agency, a group representing the world’s main energy consumers. Russia’s earnings were helped by an overall rise in oil prices after the start of the war and by growing demand after pandemic lockdowns… Russia also raked in $138 billion from natural gas, a nearly 80 percent rise over 2021 as record prices offset cuts in flows to Europe.

NYT Coverage

This leaves Russia in a stronger financial position than many had expected, or hoped, making it much easier for Moscow to afford the war in Ukraine well into the year.

Aftermath of the Earthquake in Turkey & Syria

The death toll from Monday’s earthquake and aftershocks has now surpassed 20,000 in Syria and Turkey with tens of thousands more wounded. Enormous rescue efforts are underway and aid is pouring into the Turkish areas affected but only a trickle has been able to reach the rebel-held part of Syria. Some estimates put the amount of aid in Sirya reaching government-controlled areas as high as 99% of the total despite the area affected being equally split between the government and rebel groups. Read more in Al Monitor.

Politically, President Erdogan is coming under increased criticism for the initial response to the disaster as well as previous decisions made to waive some construction laws, which may have contributed to the weak state of some buildings. Read more in The New Arab.

President Erdogan at one of the areas hit by the earthquake, Feb. 8, 2023. Photo: ADEM ALTAN/AFP via Getty Images

In Syria, President al-Assad is using the tragedy as another opportunity to normalize relations with other states further. Read more in The New Arab.

Israel-Palestine

Tension remains very high in the West Bank and Gaza as violence continues between Palestinians, the Israeli Defence Force (IDF) and Israeli settlers. Clashes are almost a daily occurrence and the number of Palestinians injured or killed is rising steadily. There have been no attacks in Isreal since the attacks of January 27 but there are fears that more serious attacks could be planned.

There are reports that the Palestinian Authority has no control or influence over any part of the protests and demonstrations going on, increasing the chances of a spill-over into outright conflict. CIA Director Bill Burns, who was a US diplomat in the region for many years, noted that the current conditions are very similar to those which preceded the second intifada. Read more in Al Monitor.

Meanwhile, arguments and protests continue in Israel over proposed changes to give the Knesset effective veto power over the country’s supreme court. Read more in The Times of Israel.

Nigerian Elections

There’s a good summary of the big issues that will affect the upcoming elections in Nigeria by Professor Jideofor Adibe in The Conversation. The Chair of the Independent National Electoral Commission (INEC) has said that preparations for the election are in good shape. Read more in All Africa.

On to the numbers

(Not sure of how to use these metrics in your risk analysis? The user’s guide is here. Want to go deeper? Read the white paper.)

Relative Values (90-Days)

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Trends (21-days)

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Brent Crude

Brent Crude is high for this 90-day interval. Prices decreased moderately over the last 21 days after significant fluctuation.

Iron and Steel

Iron and Steel are very high for this 90-day interval. Prices ended relatively flat over the last 21 days after slight fluctuation.

Market Volatility (VIX-US)

Market Volatility (VIX) is low for this 90-day interval. The index decreased moderately over the last 21 days after moderate fluctuation.

Wheat

Potentially impacting: Bread, pasta, couscous & noodle prices | Changes to food subsidies (potentially leading to unrest) | Cost of living | Movement from low-income to food insecure to undernourished | Increased theft or graft in loosely governed areas | Demand on charities.

Wheat is very high for this 90-day interval. Prices ended relatively flat over the last 21 days with little fluctuation.

Ocean Freight (FBX)

Shipping (FBX) is very low for this 90-day interval. Prices decreased moderately over the last 21 days after significant fluctuation.

Up-to-date shipping data supplied by our partner Freightos

Palate cleansers

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