GL IN BRIEF | 18 SEPTEMBER

KEY JUDGEMENTS

• Energy: Simultaneous chokepoint pressure in the Gulf is continuing to increase global energy prices. Saudi Arabian export routes are having to adapt after strikes on energy infrastructure, alongside LNG constraints, fuel pressure, and high diesel margins all increasing global prices and impacting supply.

• Critical Minerals: States continue to seek to diversify critical mineral supply chains through agreement, partnerships, and legislation. The U.S. is forging partnerships in Africa, while South Korea has expanded into Central Asia. Europe is aiming to build supply chain resilience through regulatory efforts to reduce critical mineral dependence on China.

• Security: Security pressure across the Middle East, Africa and Europe has increased. The Houthis captured key territory along the coast of the Red Sea, while Saudi energy infrastructure was also damaged after strikes. M23 has made territorial gains in the Democratic Republic of Congo; meanwhile, aerial incursions into NATO and strikes close to NATO territory, alongside hybrid attacks, are drawing greater response from European members.

• Strategic Diversification: States in the Americas, Africa, and Asia continue to form partnerships to diversify economic, defence and resource relationships, increasingly relying on bilateral agreements.

AFRICA

• Clashes in the Democratic Republic of Congo between government forces and M23 have resulted in M23 making territorial gains and pushing westward. M23 territorial expansion has increased its control over economic activity, including transport routes, taxation of mineral production, businesses and cross-border trade. M23 continues to consolidate its control in eastern DRC.

• Rwanda will gain a 25% stake in a joint mining agreement for tungsten supported by the U.S.–Rwanda Framework for Shared Economic Prosperity, increasing Rwanda's value addition and U.S. supply-chain diversification. Tungsten is used in aerospace and defence equipment, with the announcement made on the same day the Elmet Group was awarded a USD 2 billion U.S. tungsten stockpile contract.

• Ghana has reduced fuel exports to Burkina Faso and Mali amid global energy disruptions. Tightened energy supplies may place additional pressure on the two Sahel states, both of which are engaged in ongoing conflicts with jihadist groups. In Mali, fuel supply routes have been targeted by jihadist groups as part of efforts to weaken the government and disrupt the economy.

• The DRC is implementing a strategic minerals partnership with the U.S. as part of economic diversification from China. The existing U.S.–DRC partnerships have already increased copper offtake as Washington continues to develop alternative critical mineral supply chains beyond China.

STRATEGIC INDICATOR

M23 Territorial and Economic Gains

Increasing ▲

Rwanda Critical-Mineral Processing 

Increasing ▲

Sahel Fuel-Supply Pressure

Increasing ▲

U.S. Critical-Mineral Diversification 

Increasing ▲

WHAT TO WATCH

• M23 efforts to generate revenue from its westward and southern territorial expansion.

• Progress on the U.S.–Rwanda critical minerals agreement.

• Energy supplies in Burkina Faso and Mali, and jihadist attacks on fuel supply routes intended to increase pressure on governments and economies.

• Progress on the U.S.–DRC critical minerals agreement.

AMERICAS

• Canada continues its economic and defence diversification with European Commission President Ursula von der Leyen's proposal to make Canada the first associate member. The proposed arrangement would deepen cooperation across sectors, including defence, energy, and critical minerals. Canada has also applied to join the UK-led Joint Expeditionary Force, which would strengthen defence cooperation with European partners.

• Global energy pressure has led to surging international diesel prices, widening the gap between Brazilian domestic diesel prices and import costs. Restrictions and delays may have an impact on farmers as summer-crop planting commences.

• U.S.–Venezuela commercial involvement is increasing with an agreement between Continental Resources and state oil company PDVSA to develop the Ayacucho 2 block in the Orinoco Belt. The U.S. has also removed Venezuela from a list of countries that have failed to meet international drug obligations, which suggests increased counter-narcotics cooperation between the two countries.

• Chile’s state-owned copper mining company Codelco is facing delays with its restructuring plan, raising concerns about future output. Output is expected to be approximately 1.3 million metric tons over the next few years, below the previous target of 1.7 million metric tons. As one of the world's largest copper producers, the lower output may impact global supply chains, as copper is used in sectors such as electrification, defence industries and grids.

STRATEGIC INDICATOR

Canadian Economic and Defence Diversification
Increasing ▲

Pressure on Brazil’s Energy Supplies
Increasing ▲

U.S.–Venezuelan Economic and Counter-Narcotics Cooperation
Increasing ▲

Chile’s Copper Output
Decreasing ▼

WHAT TO WATCH

• Progress on Canada’s status as an associate member of the EU.

• Brazil’s diesel supplies and potential impacts on the agriculture sector.

• Increased U.S.–Venezuelan economic and counter-narcotics cooperation, particularly across oil exports and counter-narcotics efforts.

• Progress on Codelco’s restructuring and copper output. 

ASIA PACIFIC

• South Korean engagement in Central Asia produced 70 agreements and memoranda of understanding at the first summit with leaders of Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan and Tajikistan. The agreements will deepen cooperation across energy, mining, infrastructure, technology and investment. South Korean diversification will aim to strengthen the critical minerals sector, including exploration, refining and processing, to develop a whole value chain.

• High prices and constrained supplies have led to a decline in Asian demand for liquefied natural gas (LNG). The ongoing conflict in the Gulf has resulted in Asian countries pivoting to other sources such as coal and nuclear to reduce LNG consumption. With LNG prices expected to remain elevated for some time, Asian markets may need to continue to rely on alternative energy sources.

• Asian diesel refining margins have increased from pre-conflict levels of USD 22 a barrel to over USD 87, with refiners exporting to markets in Africa. High refining margins have incentivised refiners to increase diesel output as margins hit record highs. The disruption in the Gulf continues to impact fuel markets in Africa, Latin America and Asia.

• U.S.–China strategic competition is expanding with several topics, particularly AI, due to be discussed at the upcoming Trump–Xi meeting. Concerns are over the use of AI in military and cyber attacks, alongside concerns over access to U.S. technology and the AI development race.

STRATEGIC INDICATOR

South Korea–Central Asia Strategic Cooperation 

Increasing ▲

Asian LNG Demand 

Decreasing ▼

Asian Diesel Refining Margins

Increasing ▲

U.S.–China AI Competition 

Increasing ▲

WHAT TO WATCH

• Progress on South Korean–Central Asian partnerships.

• Pressure on and volumes of alternative sources of energy in Asia as the continent adapts to LNG supply constraints.

• Asian refining margins and supplies. 

• Diplomatic statements after the Trump–Xi meeting.

EUROPE

• European Commission President Ursula von der Leyen supported the establishment of a European Security Council in response to growing security threats. Leaders from the EU, UK, Norway, Ukraine and Canada are expected to be part of the council, alongside a proposed counter-hybrid playbook aimed at coordinating responses to increased hybrid incidents. The development of an additional security mechanism alongside NATO signals increasing European security coordination on the continent amid continued U.S. strategic ambiguity.

• Incursions and strikes close to NATO territory increased this week, with an Italian fighter shooting down a drone in Lithuanian airspace and a Ukrainian passenger train struck 2 km from the Polish border. NATO’s Eastern flank is facing increasing pressure through aerial incidents close to and within NATO territory, with some incidents requiring military responses.

• LNG prices could increase with Europe holding low stocks and Asian buyers facing greater competition. Price pressure could increase if Asian and European demand increases simultaneously over winter. Germany is incentivising gas storage as European gas inventories remain around 70%, their lowest level for this point of the year in over a decade. The supply pressure highlights the impacts of the disruption in Hormuz and global demand.

• The European Commission sent a Statement of Objections to Chinese mining company MMG as part of a merger review of MMG’s proposed acquisition of Anglo American’s Brazilian nickel business. The objections highlight Europe's increasing concern over critical mineral supply chains and dependence on China, with the Commission willing to use merger-control mechanisms to protect strategic industries and supply chains. 

STRATEGIC INDICATOR

European and Allied Security Coordination 

Increasing ▲

NATO Eastern-Flank Airspace Pressure 

Increasing ▲

European Winter Energy-Supply Pressure 

Increasing ▲

European Critical Mineral Protection Measures

Increasing ▲

WHAT TO WATCH

• Progress on the development of the European Security Council and diplomatic statements on countering hybrid warfare.

• NATO and Eastern flank states' military posturing alongside diplomatic statements about enforcement over NATO airspace.

• LNG volumes, prices and storage as well as Germany’s efforts to incentivise storage increases.

• The outcome of the Statement of Objections, including responses from MMG.

MIDDLE EAST

• Saudi Arabia has reportedly requested diplomatic support from China to press Iran to rein in the Houthis. China’s heavy reliance on Gulf energy supply chains may be placing additional pressure on China to use its existing regional economic relationships to exert diplomatic influence.

• Saudi Arabia and the Houthis have exchanged strikes, with the Saudi Air Force carrying out airstrikes and the Houthis launching missile and drone strikes. The Houthis have demanded an end to the Saudi blockade and intervention in Yemen. Simultaneous pressure remains on Gulf chokepoints, increasing oil prices and creating uncertainty for shipping operators. With reports that the East–West Pipeline sustained more damage than first assessed, Saudi Arabia faces greater pressure on its remaining oil export routes.

• The Strait of Hormuz remains disrupted with reports of three commercial vessel crossings on Wednesday. The U.S. announced further sanctions on an Iranian cryptocurrency exchange that the U.S. alleges has been processing payments for safe passage. Iran and the U.S. continue to compete over maritime access and enforcement in Hormuz.

• President Trump is expected to meet Gulf leaders to discuss the conflict with Iran and a postwar strategy. The conflict is drawing multiple actors seeking to find diplomatic solutions to the ongoing Gulf maritime disruption, including the great powers China and the U.S.

STRATEGIC INDICATOR

Chinese Gulf Diplomatic Engagement 

Increasing ▲

Saudi–Houthi Conflict and Saudi Oil Export-Route Pressure 

Increasing ▲

Strait of Hormuz Disruption 

Increasing ▲

U.S.–Gulf Diplomatic Engagement 

Increasing ▲

WHAT TO WATCH

• Progress on Chinese diplomatic efforts to restrain the Houthis' attacks against Saudi Arabia.

• Escalation in Saudi–Houthi attacks with the Houthis continuing to target the Saudi oil sector.

• Transit volumes in Hormuz and the types of vessels making the crossing.

• Progress on the proposed talks between President Trump and Gulf leaders.