Iran Nuclear Deal: There Is No Alternative

On April 3, President Obama called Israeli Prime Minister Netanyahu to fill him in on the P5+1 deal with Iran. But the prime minister wasn’t buying. He told the President: “The deal based on this framework would threaten Israel’s survival (and would) legitimize Iran’s nuclear program, bolster Iran’s economy, and increase Iran’s aggression and terror […]

Can Russia Escape Dollar Dependence?

Russian president Vladimir Putin is determined to wean his country off the dollar, or so he says. In July, after insisting that the international monetary system depended too much “on the U.S. dollar, or, to be precise, on the monetary and financial policy of the U.S. authorities,” Putin signed off on a new BRICS development […]

Russia’s Nuclear Revival And Its Challenges

Russia is slowly but surely replacing its aging stockpile of Soviet-era nuclear weapons with an arsenal that’s fit-for-purpose in the 21st century. Richard Weitz of ISN Security Watch reminds us, however, that a weakening Russian economy and less-than-favorable international climate may yet derail Moscow’s efforts to revive its nuclear prowess. Although attention is naturally focused […]

Is the West Risking Financial Blowback From Sanctions on Russia?

The spectacle of insanely authoritarian policing in Ferguson, as well as media jitters over ISIS and ongoing reports of action in Gaza and Ukraine, has shifted attention a bit away from simply lousy economic results from Europe. A Financial Times overview: This year was supposed to be the year the eurozone recovery took root – gathering […]

Will the U.S. Oil Boom Make Energy Sanctions Easier?

Ask someone to identify a big geopolitical consequence of the ongoing U.S. oil production boom and odds are high that they’ll invoke Iran. (Every one of the links in that last sentence is an example.) Without surging U.S. oil production, they’ll argue, sanctions on Iranian oil exports would have led to a massive oil price spike. Here is a concrete case of the oil boom yielding greater U.S. freedom of action in […]

Exxon, BP Defy White House; Extend Partnership with Russia

By Nick Cunningham: Several of the largest oil companies in the world are doubling down in Russia despite moves by the West to isolate Russia and its economy. ExxonMobil and BP separately signed agreements with Rosneft – Russia’s state-owned oil company – to extend and deepen their relationships for energy exploration. The U.S. slapped sanctions […]

Increased Oil Production Offsets Effects of Geopolitical Tensions

By Nick Cunningham: Oil prices briefly hit a three week high this week as geopolitical tension and strong demand tighten oil markets. Saudi Arabia’s Oil Minister Ali al-Naimi said on May 12 that his country would make up for any shortfall that may result from the conflict in Ukraine. After pro-Russian eastern separatists held a referendum last weekend and […]

Russian Contagion, Geopolitical Risk and Markets

Yesterday, I published my Global Economics Monthly. I argue that further economic sanctions against Russia would have significant global economic effects because of the Russia’s connectedness to energy and financial markets. Why then, are markets apparently so sanguine? Is it because investors, by and large, expect de-escalation? Is it a view that Russia does not matter […]

Global Ground Zero in Asia

The biggest geopolitical risk of our times is not a conflict between Israel and Iran over nuclear proliferation. Nor is it the risk of chronic disorder in an arc of instability that now runs from the Maghreb all the way to the Hindu Kush. It is not even the risk of Cold War II between […]

Changing Course: Financial Sanctions on Russia

There are reports this morning that the Obama administration is contemplating extending economic sanctions against two large Russian banks– Gazprombank and  Vnesheconombank (VEB).  This is a step I have called for here and here.  If true, this is a significant event and, given the magnitude of Russia’s links to global financial markets, introduces a new era in the use of economic sanctions.  It also […]