If you find scenarios like the one I discuss in the video below interesting, I discuss how changes in the global order impact several industries from insurance to manufacturing to finance to agriculture and energy and beyond in my new book, The End of the World is Just the Beginning, available everywhere–including your local bookstore.
At the onset of Russia’s invasion of Ukraine, Europe, NATO and much of the industrialized world moved quickly to isolate Moscow economically. As part of those moves, Russia saw its seaborne oil export volumes fall off precipitously–to the tune of 1 million barrels a day. Volumes that large threatened to shut in several of Russia’s oilfields.
Even as a collection of private interests moved against Russian seaborne shipments–crews, ports, captains, ship owners–it has taken European governments longer to formalize a sanctions package that denied ships carrying Russian cargoes access to the global insurance market.
While some of you might think that shipping insurance is decidedly unsexy, it forms a bedrock of modern seaborne transport. You need insurance to enter and exit ports, to transit the Suez and Panama canals, to go through high-risk areas like Malacca and Hormuz and the Bab al-Mandeb. Without it, you risk holding the bag if any problems occur. (Imagine if your tanker gets wedged sideways in the Suez Canal. Or you’re stuck on either side of said ship. Or you run aground accidentally. Etc.)
Europe and the United States account for roughly 95% of the private insurance market. Outside of that, the only realistic option is sovereign indemnification of ships–having independent states insure cargoes. India and China have gone this route, eager to gobble up Russian crude with a $30+/barrel discount. Through some inventive accounting, ship registries, ship-to-ship transfers and more, Russian crude has steadily crept back to more-or-less pre-invasion levels.
Enter American and European sanctions. The ad hoc group of shippers, crews and port workers denying Russian goods access to European sea lanes has more or less been formalized, with a global impact. As the international sanctions regime intensifies, India and China might do well to revisit their stance on importing Russian crude and decide to voluntarily reduce imports–similar to their approach at the outset of Moscow’s invasion of Ukraine.
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We will continue to post our analysis and updates on this and other topics related to the Ukraine War. This newsletter and its affiliated videologues are, and always will be, free. New subscribers can sign up here.
Finally, a reminder:
Russia’s strategic shift from thunder runs to a civilian obliteration has already forced ten million Ukrainians from their homes, with nearly four million now living in limbo in foreign lands. All proceeds from all formats of all of our previous books are being donated to the Afya Foundation, a charity which provides medical assistance to refugees from the Ukraine War.
[mk_button dimension=”outline” corner_style=”rounded” size=”large” letter_spacing=”1″ url=”https://smile.amazon.com/hz/wishlist/ls/1PRC3Y6QMPST8/ref=nav_wishlist_lists_2?sa-no-redirect=1″ align=”center” fullwidth=”true” margin_top=”25″ margin_bottom=”25″ outline_skin=”custom” outline_active_color=”#ef5c31″ outline_active_text_color=”#ef5c31″ outline_hover_bg_color=”#ef5c31″ outline_hover_color=”#ffffff”]CLICK HERE TO VIEW THE AFYA FOUNDATION’S AMAZON WISHLIST[/mk_button]
The buttons below will direct you to our purchase pages where you can both find out a bit more about each book, as well as select purchase options ranging from e-services to your local bookstore.
[mk_button dimension=”outline” corner_style=”rounded” size=”large” letter_spacing=”1″ url=”https://zeihan.com/purchase-the-accidental-superpower/” align=”center” fullwidth=”true” margin_top=”25″ margin_bottom=”25″ outline_skin=”custom” outline_active_color=”#ef5c31″ outline_active_text_color=”#ef5c31″ outline_hover_bg_color=”#8ef5c31″ outline_hover_color=”#ffffff”]THE ACCIDENTAL SUPERPOWER[/mk_button]
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Having difficulty keeping up with the chaotic and quickly-changing landscape of Russia sanctions and commodities markets or inflation?
We have been offering a series of in-depth presentations on various industries.
So far, we’ve tackled the challenges facing energy, agriculture, industrial materials and inflation. You can purchase access to the recordings of both of these webinars via the buttons below:
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