Iran: Bill of exchange.
Also: Turkey, Ukraine, Russia, Germany, the UK, Norway, China and Libya.
IRAN. Bill of exchange.
For Tehran, hostages still pay.
The White House said on Monday Tehran would access $6 billion in oil revenue and five Iranians in exchange for five Americans. The US Department of Justice said on Friday it had seized 980,000 barrels of Iranian oil bound for China.
INTELLIGENCE. The swap, announced on September 11, drew political flak, but the US wants to nudge Iran towards cooperation before the 2024 elections. And as Tehran’s factions vie for power as the health of Supreme Leader Ali Khamenei declines, Washington wants to reward the moderates. And while the deal won’t herald a return to the Joint Comprehensive Plan of Action, which the US withdrew from in 2018, Iran has slowed its uranium enrichment program.
FOR BUSINESS. The swap also acknowledges the US has less sway in the Middle East than it did when the JCPOA was signed in 2015. While Republicans think they can get a better deal, Iran is now technologically more advanced, geopolitically less isolated, and economically more diversified. While US oil seizures continue, Iran sent China an estimated 1.5 million barrels of oil per day in August – more than before sanctions snapped back in 2018.
TURKEY. Coming home to roost.
Ankara wants the West to reward its overtures.
The sale of F-16 fighter jets to Turkey is not linked to Sweden's bid for NATO membership, the US State Department said on Monday. Turkey's president said on Sunday that Joe Biden made the link and this “seriously upsets us.”
INTELLIGENCE. Washington may be in semantic damage control, but the two issues are of course linked. And while Erdogan claims Sweden’s bid is a decision for Turkey’s parliament, the reality is that this was always the quid pro quo. What else is at stake is how the US and Turkey disentangle their support for opposing sides in Syria’s northeast. This is further complicated by Russia, which supports Syria’s government and gives Turkey an economic lifeline.
FOR BUSINESS. Turkey has recently pivoted to the West on Ukraine and likely seeks a reward for good behaviour. It also needs stable ties with the US and Europe to fix its economy and bring back foreign investment and US dollars. Inflation hit 59% in August, up from 48% in July, despite recent rate rises. Turkey must somehow do this without endangering its links to Russia or Iran, which are vital for containing fuel costs, and Turkey’s energy hub aspirations.
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UKRAINE. RUSSIA. Sea change.
Kyiv might be doing better on water than on land.
Ukraine's military claimed on Monday to have recaptured a set of drilling platforms offshore Crimea. Britain's defence secretary confirmed on Wednesday that a donated Challenger 2 battle tank had been destroyed by Russian artillery.
INTELLIGENCE. While Kremlin sources have been quick to downplay the naval significance of the Boyko drill rigs, the news is a boost to Kyiv, which may only have another month before it needs to pause its haltering land campaign. It is also a boost to ships stuck in Odesa and other Ukrainian ports. Britain otherwise accused Russia on Monday of targeting a civilian vessel on 24 August. Since 18 August, only four ships have left Odesa amid a Russian barrage.
FOR BUSINESS. Even if Moscow bogs Kyiv down into another winter of attrition, any reduction in Russia’s Black Sea control gives hope for Ukrainian exports. Clogged roads and rail and an unwillingness by the EU to accept cheap grain has constrained the re-routing of Black Sea cargos during this year’s harvest. Ukraine continues to receive Western aid, but its recovery requires exports. Ukraine is hoping for growth of 2.9% this year, albeit after a terrible 2022.
GERMANY. Schadenfreude.
It’s not just voters turning against Berlin.
Following bilateral talks on Monday, Ukraine's foreign minister called for long-awaited German missiles: "you will do it anyway, it’s just a matter of time." The Alternative for Germany was poised on Sunday to win its third mayoral race.
INTELLIGENCE. Ukraine’s Dmytro Kuleba dispensed with routine courtesy when he held a joint press conference with Germany's Annalena Baerbock, who was visiting Kyiv for the fourth time and pledged an additional €20 million in aid. The interaction matches a growing disdain in European capitals for Germany, despite it being the EU’s largest economy and contributor. Poland’s ruling party unveiled a campaign ad on Monday with Germany cast as the villain.
FOR BUSINESS. Amid the diplomatic scorn, voters are fed up too, which has buoyed the opposition Christian Democrats and the far-right AfD, now polling at around 27% and 22% respectively (governing parties are at 18%, 14% and 7%). Elections aren’t due until 2025, but the EU Parliament gets re-elected in 2024. A rightwards trend is being seen elsewhere. On Monday, Norway’s Labour Party came secondin regional elections for the first time since 1924.
With the brevity of a media digest, but the depth of an intelligence assessment, Daily Assessment goes beyond the news to outline the implications.
BRITAIN. NORWAY. CHINA. Spy vs spy.
Claims of espionage reach fever pitch.
A suspect in a UK spy scandal said on Monday he was “completely innocent”. A Malaysian student was charged with spying by Norway on Sunday. Beijing on Monday released details of a US citizen sentenced to life on espionage charges.
INTELLIGENCE. Spying is as old as time, but human intelligence often entails the most risk for least reward. In an era when so much information is open source and when analysis, not gathering, delivers the edge, a spate of spy stories thus seems quaint. Yet states are under pressure to prove their institutional integrity. Shortly after Britain announced the arrest of a parliamentary researcher, Australian lawmakers urged a review of similar staff in Canberra.
FOR BUSINESS. As in the Cold War, two casualties of geopolitical tension are free speech and international dialogue. The risk of requiring security clearances for political staff is that it restricts democratic diversity. The risk of curtailing objectionable speech on the grounds of foreign disinformation is that it quells legitimate debate. As for foreign links, which scientists and businesses are increasingly coming under suspicion for, this was once the mark of success.
LIBYA. Desert storm.
Another North African tragedy.
As many as 2,000 were feared dead from weekend flooding in Libya's east, authorities said on Monday. Four oil ports closed on Saturday evening ahead of the storms, which have also killed dozens across Greece, Bulgaria and Turkey.
INTELLIGENCE. Amid wild El Nino weather worldwide – from a revived hurricane season in the Atlantic to record rains in Hong Kong – the Mediterranean Storm Daniel could have the highest death toll, with an estimated 7,000 still missing. The former Islamist stronghold of Derna has been hardest hit and could test the grip of regional warlord Khalifa Haftar, with potential implications for stability in Sudan and Chad, as well as migration to Europe.
FOR BUSINESS. Damage to oil infrastructure may be minimal, but the implications for political stability may be long-term. Libya, whose administration is split between groups aligned with Haftar’s Tobruk-based Libyan National Army and authorities in Tripoli, has already been weakened by years of civil war. Stability has been further shaken by claims by a former Italian prime minister last week that France downed a plane in 1980 in a bid to kill Muammar Gaddafi.
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