Deal With the Devil(s)

The Biden administration is shopping around with some less than savory potential partners in order to lessen the blow of energy sanctions against Russia. Venezuela, Saudi Arabia and Iran – all well known and fairly maligned regimes from right, left, and center of American politics. All sitting on top of some of the largest energy reserves on the planet. 

For a bit of fairness, the Biden administration is doing nothing new. American governments have held their nose and worked with a whole host of despotic characters, especially with the aim of undermining the bigger devil in the room. Partnering with Stalin against Hitler. Working with Communist China to undermine a Communist Russia. But if we’re going to continue to be fair, will the outreach work? 

Iran and Venezuela especially present enormous challenges to anyone looking to develop their energy deposits (technical, geological, financial) and even Saudi Arabia – which loves to boast about its spare capacity – would take about a year to bring on a sustainable million barrel increase in production. All told, working with the devils we know in Riyadh, Caracas and Tehran would offset roughly about a quarter of the oil lost from sanctioning the bigger devil in Moscow. 

Add in the Biden administration’s other likely moves to help address rising US gasoline prices and, well… there doesn’t seem to be a lot of relief coming for oil consumers in the foreseeable future.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

Join Us – The Ukraine War: Agriculture Edition

Below is one of my favorite (if incredibly depressing) graphics from our most recent book, Disunited Nations.
 
Before Africa began the industrialization process, only the best lands on the continent were under cultivation. As a rule, slopes, jungle, arids, and marshes make for horrible farmland, and Africa was no exception. Africa in 1950 had well less than one-quarter of its land mass under crop, and yields per acre were decidedly pre-industrial.
 
But then the American-led globalized Order occurred. Africans were for the first time able to tap industrial inputs en masse: fertilizers, pesticides, herbicides, fungicides, better seeds and mechanical equipment. And above, finance, to allow for the purchase of fertilizers, pesticides, herbicides, fungicides, better seeds and mechanical equipment.

Fast-forward to the year 2000 and Africa became a continent changed. Add industrial inputs to okish lands and the Africans got great yields. Add industrial inputs to crap lands and the Africans got okish yields. In five decades, the Africans presided over the quintupling of their local food supplies. The reason we think of Africa as food insecure is because most African countries … are. Output may have increased by a factor of five, but during the same time window Africa’s population increased by a factor of six.
 
Industrialization is great…until it’s not. Nearly all of Africa’s agricultural inputs are imported from a different continent. Should anything happen to those input flows, much of what has made modern African agriculture successful will unwind with a vengeance…and Africa’s population will still need to be fed.
 
We’ve been babystepping to a collapse of agricultural supply chains for over a decade, but the sharp shock of the Ukraine War has kicked the deglobalization process into high gear. This calendar year we will experience breakdowns in the supply systems that make industrialized agriculture possible, and not just in Africa. The Middle East and East Asia also face a catastrophic unwinding of the input streams that keep regional populations alive, while major agricultural producers like Australia and Brazil will face challenges far beyond what their systems are capable of tolerating. The result is the same in all of them: lower yields.
 
And lower yields means famine.

Join us March 11 as Peter Zeihan walks us through the end of global agricultural as we know it. It will be a wide-ranging discussion that encapsulates all the many trends in play today, from Chinese Communist Party Chairman Xin Jinping’s cult of personality, to dangerously low energy investment to, of course, the Ukraine War.

REGISTER FOR THE UKRAINE WAR: AGRICULTURE EDITION

Can’t make it to the live webinar? No problem! All paid registrants will be sent a link to access the recording of the webinar and Q&A session, as well as a copy of presentation materials, after the live webinar concludes. 

China, Oil, and the Ukraine War

Russia is finding it increasingly difficult to sell its oil in Europe and other traditional markets, as a mixture of sanctions, market pressures and consumer choice are shifting against Moscow. It’s not that Russia is barred against selling oil. It’s that shippers, insurers, and dock workers don’t want anything to do with the stuff. So where does it go?

There is a persistent question – and at times, assumption – that Beijing will step in to buy up whatever crude Russia can’t sell elsewhere.

Not so fast. 

The problem is infrastructure. The pipelines that carry oil to Russia’s Pacific loading terminal, and directly into China itself, source their crude from eastern fields. Russia’s western exports are sourced from western fields. There’s precious little in the way of connecting infrastructure between the two–meaning if Russia can’t load tankers in the Baltic and Black seas, there’s little reason to pump it at all. What does this mean for Chinese imports of Russian crude? Probably not what you’d expect…

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

Russia Sanctions, and Nickel

The London Metals Exchange halted nickel trades today after prices approximately tripled. Nickel is a metal that surrounds us in our daily lives, primarily as an alloy component in stainless steel: bridges, cutlery, appliances. 

But nickel’s importance in our future lives may be even greater still. While not as flashy – at least, before current events in Europe started pushing commodity prices higher – as lithium and cobalt, nickel is every bit as important for green tech. Nickel’s ubiquity and commonplace role in our lives actually helps hide its importance. When was the last time you read a think-piece on nickel supply chains?

As we look toward technologies of tomorrow, their positive impacts have to be weighed against the variety of new and growing inputs going into goods such as electric vehicles; you might be able to detach your economy from a handful of problematic energy exporting countries only to open yourself up to dozens of smaller, more precarious trade relationships.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

FRIDAY — The Ukraine War: Agriculture Edition

Russia’s ongoing invasion of Ukraine is now in its second week. The rage that swept the Western world — particularly acute in Europe — has not abated, with all talk about how to punish Moscow more thoroughly. New sanctions are under discussion. Goals range from gutting Russia’s oligarchic class, to starving the Kremlin of income, to broadly shutting Russia out of the global economy completely. So far, the combination of government sanctions, public outrage, and corporate boycotts are putting us well along the path to that goal.

There are costs. Costs that the world is only now starting to consider. Russia is the world’s largest exporter of natural gas and nickel, the world’s second-largest exporter of oil and steel, and the third-largest exporter of coal and aluminum. We can live without these things, but make no mistake, it will hurt.

What we cannot live without food. Russia is the world’s largest exporter of wheat, and it has invaded Ukraine, the world’s fifth-largest exporter. Russia’s war strategy uses techniques pioneered in the flattening of Groznyy in the Second Chechen War, that were then honed during the destruction of Aleppo in the Syrian Civil War. Russia’s artillery is now obliterating Ukraine’s civilian infrastructure one city at a time

It is gruesome. It is inhumane. It is unforgiveable. And it is only the beginning of the destruction. We are being treated to a feast of visual violence in the ongoing destruction of Ukrainian cities we have recently become familiar with: Kyiv, Kharkiv, Mariupol. But lost in the noise of the burning of Ukraine’s large population centers is Russia’s far more methodical, downright Hitlerite, annihilation of Ukraine’s towns and villages. The towns and villages that are the bone and sinew supporting the Ukrainian agricultural sector. Ukraine will not plant crops this spring or summer. The world has lost one of its largest and most reliable sources of wheat, sunflower, safflower and barley.
 
Nor will Ukraine return to the ranks of major food suppliers anytime soon. Russia’s wave of deliberate destruction will soon reach the port city of Odessa. Not only is Odessa Ukraine’s commercial capital, not only will its fall signal an end to Ukraine’s maritime frontage, Odessa is also the export point for nearly all of Ukraine’s agricultural bounty. Until it is freed from Russian control and rebuilt, large-scale Ukrainian exports will remain beyond reach.

This, all this, is unfortunately only the tip of the Third Horseman’s spear. Russia’s willful destruction of Ukraine is only one of a host of factors adding up to the most stressed agricultural markets in post-World War II history.
 
Join us this Friday, March 11, as Peter Zeihan lays it all out in the context of the Ukraine War. Inputs, outputs, producers, products, markets, transit, consumption, and the beginning of the end of global agriculture.

REGISTER FOR THE UKRAINE WAR: AGRICULTURE EDITION

Can’t make it to the live webinar? No problem! All paid registrants will be sent a link to access the recording of the webinar and Q&A session, as well as a copy of presentation materials, after the live webinar concludes. 

Odessa, and Beyond

Much of the current focus on the Ukraine war is currently on the shelling of the major urban centers of Kharkiv and Kyiv. And from a political and humanitarian perspective, that certainly makes sense. 

But there is a broader strategic and economic perspective that I feel as though some are missing when it comes to the Russian campaign along Ukraine’s southern coast, currently focused on the week-long bombardment of the southeastern port city of Mariupol. If (sadly, I think this is now more of a case of “when“) the port of Mariupol falls, there will be little to stop Russia from sending troops west from Russia proper, through the Ukraine separatist regions, to the Crimean peninsula, and onward to Ukraine’s primary commercial port of Odessa.

Given the considerable effort Russia will have expended to reach Odessa, there’s little reason to expect them to stop there…

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

TODAY: The Ukraine War: Energy Edition

Few things in are more complex than energy logistics, and the world is about to get a masterclass.

Different crude grades with different chemical make-ups with different reliabilities lead to different refining dependencies. Some crudes are thick (heavy). Others thin (light). Still others are laden with impurities (sour), while others are pure (sweet). Small mismatches in crude quality can typically be managed with some creative blending.

That’s totally not what’s about to happen.

Cancelled ship insurance policies. Customers and shippers not wanting to be caught with potentially-sanctioned oil. Investor abandonments. War disruptions. Sabotage. The world’s single-largest crude grade by volume – Russia’s Urals blend – is vanishing from the market. Within weeks some 5% of global oil production will be gone. For years. At a minimum.

The result isn’t simply the biggest energy shock we have experienced since World War II, but one whose effects will vary wildly country to country. And one that will force a great many players to take action to secure their ongoing economic capacity. That will not go over will with others.
 
Join us TODAY – March 4 – for the Ukraine War: Energy Edition. It is the first in our open-ended series on the economic effects and aftereffects of the Russian invasion..

REGISTER FOR THE UKRAINE WAR: AGRICULTURE EDITION

Can’t make it to the live webinar? No problem! All paid registrants will be sent a link to access the recording of the webinar and Q&A session, as well as a copy of presentation materials, after the live webinar concludes. 

NEXT WEEK: The Ukraine War: Agriculture Edition

Russia’s abundance of flat, cool-temperate land doesn’t provide much in terms of defensible geography. But it is good for growing grain, particularly wheat. Russia’s place in global grain markets is also a great example of technology helping a country overcome geographic limitations. Moscow was not blessed with a country boasting an American or German level of navigable riverways, nor are its prime grain producing regions particularly close to any of its ports. 

Enter rail. 

The below graphic is an excerpt from my upcoming fourth book, The End of the World is Just the Beginning: Mapping the Collapse of Civilization. We can see that as Russia was able to install more railways, grain production and exports exploded by the mid-to-late 19th century. And the Russians have never really looked back. (Russian agricultural technology has not really advanced much since the introduction of rail cars and mechanical tractors and harvesters, but I digress…)

Now we are gearing up for the release of our newest project – The End of the World is Just the Beginning: Mapping the Collapse of Globalization. The new book breaks down the future shape of various economic sectors in a post-globalized world: finance, manufacturing, agriculture.
Consider the above map. Every country that is not green or blue is a food importer. Keeping the global population alive requires global peace and global sRussia is often derided as a gas station masquerading as a country. As I have noted before, this is an oversimplification that belies the significant role Moscow plays in global agricultural markets. Russia and its wheat belt neighbors, particularly Ukraine, are significant agricultural exporters of grains and seed oils. But Russia is also leading global exporter of fertilizers and fertilizer components. Not only do Russian fertilizer exports help support agricultural production in Brazil, China, India and Europe, but they help provide necessary supply in a globalized market that is increasingly seeing farmers’ input costs rise.
 
The breaking of trade relationships, spasms in energy pricing, and most certainly the Ukraine War will limit sharply what is possible in the world of agriculture, and do so more quickly than I have ever feared. Join us March 11 for a seminar on the impact of the Ukraine War on global agriculture. We’ll dive deep into the product and input disruptions that will shape our world this year, and deep into the future.

REGISTER FOR THE UKRAINE WAR: AGRICULTURE EDITION

Can’t make it to the live webinar? No problem! All paid registrants will be sent a link to access the recording of the webinar and Q&A session, as well as a copy of presentation materials, after the live webinar concludes. 

TOMORROW: The Ukraine War: Energy Edition

Nowhere on earth boasts the sheer volume of cross-border hydrocarbon infrastructure as we see between Russia and its European neighbors. Or between Russia and the heart of the EU. Or between Russia and the bulk of NATO. A matter of perspective, I suppose. 

Part of it is due to geography–flat land makes pipelines easier, and you have a captive, er, consumer population with underwhelming oil and gas reserves on one side of the border, and plentiful oil and gas on the other. Japan and China, try as they might, aren’t getting directly pipeline connectivity to the Persian Gulf. 

Part of it is also strategic. 

According to one’s perspective, Russia’s economy is wrapped up too intimately with that of its customers to threaten their stability. Ditto for the primary transit states carrying the bulk of Russian energy exports into Europe: Belarus, and Ukraine. As for the other side, well–how have the Europeans fared this past winter? 

Now we are gearing up for the release of our newest project – The End of the World is Just the Beginning: Mapping the Collapse of Globalization. The new The above graphic is from my upcoming fourth book – The End of the World is Just the Beginning: Mapping the Collapse of Globalization. The new book breaks down the future shape of various economic sectors in a post-globalized world: finance, manufacturing, agriculture.
 
And energy.
 
Anyone following global energy trends and pricing can see that what happens in Russia’s neighborhood, does not stay in Russia’s neighborhood. Oil’s the easy part, and pricing is reactionary. But what about refinery supplies? North American and global natural gas pricing differentials? The future of the European LNG market? Asian supply premiums? The demand for new infrastructure development?
 
Join us tomorrow, March 4, for our next seminar on the fate of Russian energy, and how its foibles will shake the global economy off its foundation.

REGISTER FOR THE UKRAINE WAR: ENERGY EDITION

Can’t make it to the live webinar? No problem! All paid registrants will be sent a link to access the recording of the webinar and Q&A session, as well as a copy of presentation materials, after the live webinar concludes. 

Welcome, a Bit of Background, and How to Help

This is a welcome and a bit of a (re-)introduction of who I am and what we do here at ZoG for the new followers and newsletter subscribers who have joined us over the past week since Russian began their invasion of Ukraine. As many of you can imagine, our services are in a bit of demand at the moment, but we’re trying to get content and explainers out as fast as possible. 

For those who are new here, the best explainers of how we view the world–and more important, what we see coming down the pipeline–can be found in my books. 

But most important, many of you have asked how to help those who are currently suffering in Ukraine. There are many aid groups doing laudable work, but one we are supporting is the Afya Foundation.

At the beginning of the COVID pandemic, we asked our readers who were so inclined and able to consider donating toward a cause we thought was important: Feeding America.

While we still believe strongly in their mission, with recent events in Ukraine we are asking our subscribers to consider supporting a charity focused on relief efforts there. There are many good ones to choose from, but one in particular we are supporting is the Afya Foundation.

They collect money and health supplies for underserved communities in the world, and have begun delivering non-combat support to refugees and population centers in Ukraine. We hope that those who can, join us.

DONATE TO AFYA FOUNDATION