[FO] Global Situation Report for Friday, 09 June 2023

Good morning, and welcome to the Global Situation Report for Friday, 09 June 2023. 

1. FIRST UP: MBS threatened “major” economic pain on U.S.

• According to a leaked classified report, Saudi Crown Prince Mohammad bin Salman threatened “major economic consequences for Washington” after President Joe Biden threatened “consequences” for the Saudis slashing oil production. [READ MORE]
• The Biden administration did not follow through on those “consequences” after two successive oil production cuts by the Saudis.

Why It Matters: The United States no longer lives in a shoot-first-ask-questions-later global landscape. The weaponization of sanctions and push towards de-dollarization has severely limited the ability of the U.S. to impose its foreign policy on other countries, especially those that have new economic opportunities and security cooperation through China, BRICS, and the Eastern Alliance.

2. WAR DRILLS: IDF wraps up war games aimed at two fronts

• The Israeli Defense Force ended a two-week military exercise focused on a two-front war with Iran and Lebanon’s Hezbollah.
• The exercises simulated ground combat in Lebanon and air strikes “deep in enemy [Iranian] territory”.

Why It Matters: Israeli military and intelligence officials have been warning of a potential war over Iran’s nuclear program. The most recent warnings sounded more urgent than usual. Meanwhile, White House officials denied reports of an interim deal that would allow Iran to export oil and access frozen funds in return for ending its highly enriched uranium program.

3. “DISASTER”: ASEAN schedules first joint military drills

• The Association of Southeast Asian Nations (ASEAN) announced their first-ever joint military drills will be held in September at the southern edge of the South China Sea.
• According to Indonesian Military Spokesman Julius Widjojono, the non-combat drills are due to “high risk of disaster in Asia, especially Southeast Asia” and focus on “security and rescue” and social services.

Why It Matters: While ASEAN could respond to typhoons, earthquakes, and other natural disasters, these drills could also be aimed at the regional disruption and humanitarian fallout of a U.S-China war. 

4. COOPERATION: Gerasimov says Russia, China military relationship deepening

• Chief of the Russian General Staff General Valery Gerasimov said the Chinese appointment of Colonel-General Liu Zhenli as the Chief of the Joint Staff Department of the Central Military Commission would expand Russia-China military relations.
• Russian and Chinese military officials also confirmed that Russia would take part in this year’s North Interaction military exercise.

Why It Matters: Liu’s March promotion coincides with a shift in Chinese military policy. China had been providing “dual-use” equipment under the cover of civilian use, but more recently provided Tigr armored vehicles to the Russian military. If China continues to provide overt military support, then they almost certainly intend to use Ukraine as a proxy war that further depletes U.S. and NATO supplies before military operations against Taiwan.

5. PROTEST: Polish farmers block Ukrainian cross-border produce

• Polish farmers are protesting the continued flow of Ukrainian agricultural goods coming over the border. Most recent protests included blocking traffic at the border, stopping Ukrainian grain shipments.
• Polish farmers say Ukrainian produce is depressing local prices and competing with Polish agricultural exports.

Why It Matters: With its Black Sea ports disrupted, Ukraine’s western border has been an alternative route to export Ukrainian grains, especially by rail. The Black Sea Grain deal is set to expire in July, and Polish farmers are pushing the European Union to enforce the Ukrainian grain export ban through September. As a result, shipments of Ukrainian grain to China, its largest buyer, could slow, just as China is trying to ramp up grain purchases to make up for up to a 20% drop in its winter wheat harvest.

DON’T MISS: Retired Marine Lt. Col. and former CIA Paramilitary Operations Officer Max Morton releases his next Early Warning report today, focusing on developments in the global balance of power. It will be released to Early Warning subscribers this afternoon.

THAT’S A WRAP: This does it for today’s edition. Thank you for reading. If you know folks who would also like to receive this email, would you please forward it to them? We appreciate you spreading the word. – M.S.