Nukes, Ukraine, Xi and more on global geopolitics

KYLE: Hey everyone, Kyle here, I’m the Social Media Manager at Zeihan on Geopolitics. We’re trying something new today, a little question time with Peter. So we’re gonna do some rapid fire questions, he’s gonna give us a little quick response, try and cram as many questions as we can into 5, 8, 10 minutes. We’ll see how it goes. So without further ado, we’ll get started. Peter, if you want to say hi before we get going, go ahead.

PETER: Let’s do it.

KYLE: All right. All right. First question. Could you give us an update on Ukraine and what you expect to see from both sides in the coming months?

PETER: Oh, God, that’s supposed to be a quick question? Okay. We’re in a holding pattern in Ukraine right now. We’re in winter, and so everyone is trying to adjust their logistical chains to deal with what’s going on.

The more interesting stuff that’s going on right now is political. In the United States, [a] fringe faction of the Republican Party has made it impossible to get anything done — not, not [just] on Ukraine, anything. So we’ve got packages on Taiwan and Israel, they’re also on hold. This, so far, has been the Congress to pass the fewest laws of any Congress in American history. So it’s not just that there’s one or two issues that they’re throwing a fit about. They’ve destroyed the ability of the United States government to function at the legislative level completely. So this is not a Ukraine issue, this is a Republican issue. And until that is resolved one way or another, which may be, new elections coming up in 2024, I don’t expect too much movement on the American front.

The Europeans are really bellying up to the bar. Even before America’s Republicans had gutted the ability of Congress to pass packages for Ukraine, the Europeans had already stepped up and were putting more money and more arms into Ukraine than the United States was. That has now expanded by almost a factor of two in the last four months. Moreso than the Americans, the Europeans realize that if Ukraine falls, it’s all over for them. And then we would probably have to have a nuclear-armed Germany, Sweden, Finland, and Poland, and nobody wants that. So we’re in this spot where everyone is pivoting to see how much worse they can bring to bear.

And the Russians are doing the same thing. Their industrial production is up. It’s almost exclusively for military consumption. So it’s kind of a race right now to see who can get their ducks lined up.

KYLE: Hopefully these are a bit quicker. So let’s get on to the next one. Why has the Russian oil and gas industry held up so well, despite sanctions and their lack of skilled labor and engineering?

PETER: Great question. The short answer is that unlike the shale sector in the United States, where wells can come on in a few weeks, but then they kind of peter out over a course of a few months, the wells in Russia are much more traditional. And so they do produce for years. We also have a mix of old and new wells [sic…] the huge amount of investment into Russia by companies like BP and Exxon, specifically between 2014 and 2021. So there’s a lot of fresh stuff.

The reason I thought that things were going to go down faster is I expected somebody to take a shot at a tanker or hijack a tanker, which wouldn’t have meant that no one would have picked up the crude from the export ports at all. And then the pressure would have built back up through the pipelines all the way the wellhead, they would have had to just shut the whole thing down. That hasn’t happened.

So far, the Europeans are sticking to their guns on wanting to make sure that they don’t use any crude, but they want to make sure that the crude still reaches the global market. So it’s almost all going on a very, very, very, very, very long sail around Europe, around Africa, around India. And then ultimately, that’s China. Well, I guess India is in there, too. It’s a very, very fragile system. And all it takes is one thing going wrong with pirates in the Red Sea or the Houthis, in the Black Sea, or a problem with the Turks, or a problem with the Estonians, any one of these things can shut it all down. But it hasn’t happened yet.

KYLE: Hasn’t happened yet. That’s right. On to the next, how likely is it that Putin or Xi pushes the big red button?

PETER: In the case of Xi, we have no idea, because he’s basically put himself in a box, and we don’t even know what he’s thinking. There’s no secondary group of people [who] have phones to tap. One of the things we’ve seen with propaganda even, in China in the last few months, is he’s so destroyed the ability of the system to function that all the bureaucrats and all the diplomats are just looking to him to see what he says publicly and then parroting that, and it’s made it completely impossible for the Chinese diplomatic corps to do anything. Because they don’t want to do anything that’s going to piss him off, because they don’t know what they what he’s thinking, because they don’t speak with anyone. So for the last two months, [sic] in the aftermath of the San Francisco Summit, so it was all fuzzy, and then he said something that was very Wolf Warrior-y. And so for the next five weeks, I’m sure it’s all going to be rah rah rah to the wall. No idea.

Putin for the Russians isn’t gonna throw nukes as long as the war in Ukraine is progressing in its current form. If the Ukrainians lose, and the Russians come up against [the] NATO border, then we get a nuke. If the Ukrainians win, and they push into Russia to make sure there can’t be another attack, then we get a nuke. But as long as we’re kind of in this holding pattern, we’re okay.

KYLE: Drilling down a little bit there. Can Russia use tactical nukes in naval battles and avoid, you know, the fallout, is there any fallout risk can be minimized?

PETER: There are no naval battles to be had. So I’m not too worried there. NATO doesn’t have a force, independent of Turkey in the Black Sea. And there are no hostilities. So if Russia were to lob a tac nuke at a NATO vessel just ‘cuz they’d lose Moscow. I don’t think that’s going to happen. As for tactical nukes in Ukraine on the ground, I don’t think that would solve any of the problems that they have. The front’s over 1,000 miles long. Using a handful of tactical nukes against dispersed forces, like we’ve been seeing in the war to date, isn’t going to achieve anything except throw the entire world against the Russians. The Biden administration has made it very, very, very clear to the Russians that if tac nukes come into play, every single Russian asset everywhere in the world that’s not in the Russian Federation, is forfeit within the next seven days, and every Russian port will be shut down and/or destroyed. That is the starting point for the retaliation. And it would only go up from there, that was communicated to the Russians six months into the war. They have a very clear idea of what the price to be paid would be.

KYLE: Only a few questions in and I need a breath already…