Iran, the US: Crude control.
Also: Canada, Ukraine, Russia, China, Haiti and Colombia.
IRAN. UNITED STATES. Crude control.
The US sees off another Iranian vessel seizure.
The US Navy said on Wednesday it had prevented Iranian forces from seizing two oil tankers near the Strait of Hormuz off the coast of Oman. Washington claims Tehran has “attacked or seized” nearly 20 commercial vessels since 2021.
INTELLIGENCE. Oil tankers have become collateral damage in worsening US-Iran relations. Two vessels were seized in May as retaliation for the US seizure of its sanctioned crude. Washington and Tehran have been quietly talking in recent months. But hopes are dim about a return to the 2015 nuclear accord. Iran persists in developing its nuclear program, the US became hesitant to strike a deal after mass protests, and tit-for-tats hardly grease diplomatic wheels.
FOR BUSINESS. The risk of direct conflict between the Iranian and US navies remains low. But previous successful seizures, which Tehran claims are lawful, have added pressure to insurance costs. Should OPEC+ succeed with its attempts to balance demand, the seizures may add to oil prices too. More seizures are likely, despite Tehran’s attempts at reconciling with its neighbours and – it hopes – finding accommodation with Washington.
IRAN. CANADA. Lawfare.
Unable to talk, Iran and the West fight it out in the courts.
Canada and three European countries on Wednesday filed proceedings against Iran in the International Court of Justice. Ukraine International Flight 752, carrying 63 Canadians, was shot down in January 2020 shortly after departing Tehran.
INTELLIGENCE. The downing of a scheduled civilian flight would have received vastly more attention had COVID-19 not quickly eclipsed the news. At the time, Iran admitted it had targeted the plane after mistakenly identifying it as a US cruise missile. This may not be as ridiculous as it sounds. Just five days earlier, an Iranian general was assassinated by a US drone strike at the Baghdad airport – a move that almost saw NATO troops expelled from Iraq.
FOR BUSINESS. Legal action reflects the parties’ inability to reach a diplomatic settlement, even when Iran has admitted fault. Cases at the ICJ have taken up to 15 years to resolve. And, in the absence of diplomatic relations, the court has become a locus for resolving disputes. Iran already has pending claims against the US for withdrawing from the 2015 nuclear deal and Canada over its domestic courts awarding compensation to Flight 752’s victims.
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UKRAINE. RUSSIA. The nuclear option.
Warnings of a false flag at Europe’s largest atomic power plant.
Volodymyr Zelensky said on Wednesday that Russia was preparing to stage an explosion or accident at the Zaporizhzhia nuclear power plant, under Russian occupation since March 2022. The Kremlin denied the allegations.
INTELLIGENCE. Zelensky said Russian forces had placed explosives on the plant’s roofs. Russian social media has accused Ukrainian saboteurs of doing the same. The International Atomic Energy Agency said it has not observed any mines or explosives. The Zaporizhzhia plant sits on the Dnipro River, with Ukraine controlling territory to the north and Russia to the south. Local wind direction suggests that any explosion would largely impact Russian-held territory.
FOR BUSINESS. Both Ukraine and Russia have accused each other of shelling around the plant and fighting continues in the vicinity. Yet the final reactor was put into “cold shutdown” on 8 June, limiting the chances of any large-scale disaster. Experts assess an explosion at Zaporizhzhia would more resemble the 1979 Three Mile Island meltdown than the 1986 Chernobyl disaster or even the 2011 Fukushima accident. The biggest fallout would be political.
CHINA. UNITED STATES. High-tech stakes.
China threatens escalation as Yellen lands in Beijing.
US Treasury Secretary Janet Yellen arrived in Beijing on Thursday, days after China imposed export curbs on rare earths and threatened further measures. The trip comes just weeks after Secretary of State Anthony Blinken met Xi Jinping.
INTELLIGENCE. The US and China are talking. But both are carrying sticks. Beijing’s recent export restrictions targeted key raw materials needed to manufacture semiconductors, electric vehicle batteries, radars and satellites. Chinese media warned this was “just the beginning” and would escalate if the US imposes more restrictions. This may be just negotiating tactics, but China produces 60% of the world’s rare earths, four times as much as the US.
FOR BUSINESS. Yellen’s mission is critical. Even if she convinces Beijing no more measures are forthcoming, persuading the hawks at home will be harder. Washington and its allies are increasingly protective of materials used in technologies, like artificial intelligence, capable for developing autonomous, hypersonic and cyber weapons. Pursuit of semiconductor self-sufficiency risks leading to overcapacity and price wars. All chips are on the table.
With the brevity of a media digest, but the depth of an intelligence assessment, Daily Assessment goes beyond the news to outline the implications.
HAITI. Gangsters’ paradise.
The US and UN call for a new peacekeeping operation.
US Secretary of State Anthony Blinken said Wednesday that a multinational force was needed to help Haiti’s police restore. The UN, which has 12 current peacekeeping missions, though none in the Americas, has made similar appeals.
INTELLIGENCE. Haiti requested last October for a peacekeeping operation, but until now there has been little appetite to intervene. Gangs control four-fifths of Haiti’s capital. Violence has surged to the highest level in decades. The national police have lost control and Haitians have resorted to vigilante justice. So far, the UN Security Council has only approved sanctions on gang leaders. It meets on Thursday to consider further measures.
FOR BUSINESS. A failed state on the US’s doorstep would create further headaches for border authorities. But even if the US makes the case at the UN, rifts with other Security Council members, notably Russia and China, may leave Haiti in the lurch. Moscow and Beijing may want something in return. Russia has a history of meddling in the Caribbean. China may welcome the chance to cleave off one of Taiwan’s last-remaining diplomatic allies.
COLOMBIA. Guerrillas in the midst.
Bogota nears a truce with its last remaining rebel group.
Colombia’s government and the country’s last active rebel group, the National Liberation Army (ELN), agreed to a truce on Wednesday. The ELN said it would stop fighting on Thursday ahead of a full ceasefire in August.
INTELLIGENCE. President Gustavo Petro’s ambition is “total peace” for a country wracked by insurgencies for 60 years. A ceasefire with the ELN, Colombia’s last insurgent group, would be historic. The ELN has a presence in 16% of Colombian municipalities, controls territory along the porous Venezuelan border, and has 2,500 armed personnel. But keeping the peace with a decentralised movement funded by drug trafficking may prove elusive in practice.
FOR BUSINESS. The ELN killed three police officers on the day of the ceasefire. And even if it holds, Colombia is a long way from eradicating violence. The government has not sought disarmament, the ELN remains in active combat with its rivals, and its distributed structure makes it hard to control. Don’t expect supply chain disruptions for cocaine – a $100 billion per annum commodity – some of which found its way to the White House library this week.
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