Welcome to Energy, Politics & Money (EPM), where we take a daily look at the interconnected worlds of Energy, (Geo)Politics and Money. Curated from the world’s leading sources of information, our analysis and commentary is designed to help you make sense of the events driving the major developments in the world.
In this roundup, we look at:
- The rapid erosion of Israel’s soft power, as events at the UN last week indicate it is transforming from a “darling” who could do no wrong, to a pariah who needs to be shunned and avoided
- The re-imposition by the E3 of sanctions on Iran over its nuclear program; and Iran’s release of secret Israeli documents about its nuclear program, in effort to “expose” the US-led efforts to punish Iran for its nuclear program as being hypocritical and a cover for an attempt at regime change
- Russia’s response to US president Trump’s 180-degree turn on the subject of Ukraine last week; and its response to the accusation that it is preparing to attack Europe
- How US consumer spending remains strong, driving US GDP growth to close to 4% during the 2nd and 3rd quarters of this year
- South Korea pushback against the $350 billion in “upfront investments” that the US has demanded in return for lower tariffs
- The speculation that OPEC will again hike production in November
- Huawei’s plan to compete with NVIDIA on AI focused semiconductors
Geopolitics
As to Gaza, Israeli strikes and gunfire killed at least 59 people across Gaza on Saturday, writes The Associated Press. Among the dead were those hit by two strikes in the Nuseirat refugee camp — nine from the same family in a house and, later, 15 in the same camp, including women and children. Hospitals and health clinics in Gaza City are being purposely targeted by the Israeli military as part of its operation in the area, AP adds. Nearly two weeks into the offensive, two clinics have been destroyed by airstrikes, two hospitals shut down after being damaged and others struggling with medicine, equipment, food and fuel in short supply. On Friday, aid group Doctors Without Borders said it was forced to suspend activities in Gaza City. The group said Israeli tanks were less than a kilometer (half a mile) from its facilities, creating an “unacceptable level of risk” for its staff.
Overnight into Sunday and on Sunday, the Israeli army launches 140 airstrikes and killed 77 people, writes The Guardian.
Meanwhile, there was another bizarre stunt by the US – Israel Alliance, this time surrounding Israeli prime minister Netanyahu address to the UN General Assembly last Friday. Ynet writes that the Israeli army deployed loudspeakers inside Gaza, and hacked the phones of the people in Gaza, to live broadcast the speech. EPM notes one can only wonder what the objective of this move was. Additionally, we note that since it was directed at the general population of Gaza, it effectively undermines the argument by the US – Israel Alliance that their operation in Gaza is solely directed at Hamas fighters and doing whatever possible to avoid civilian casualties. The death toll in Gaza coupled with the video imagery coming out of area already disproved this argument. The directing of propaganda messages to the civilian population, threatening them with “death” and being “hunted”, provides further evidence that a genocide is going on.
The implications of the US – Israel Alliance’s actions in the Palestinian territories on the global stage are becoming clear, as UN delegates walked out of the room when Israeli prime minister Netanyahu began his address, writes CNN. EPM notes it is, in itself a small event, with little impact on today’s geopolitics. Just as the recognition of a Palestinian state by a variety of countries from around the world is, in itself, a small event with little impact on today’s geopolitics. Both events signal, however, that on the international stage, Israel is rapidly transforming from a “darling” who could do no wrong, to a “pariah” who needs to be shunned and avoided. In other words, and as EPM forewarned from 2023 onwards, the US – Israel Alliance’s actions are causing rapid erosion of both countries’ soft power. Since Israel always had less of it, it will be the first to experience the damage this does to a nation.
Israel is rapidly transforming from a “darling” who could do no wrong, to a “pariah” who needs to be shunned and avoided.
As to Iran, France, Germany and the United Kingdom reinstated their sanctions on Iran over the nuclear issue, writes The Associated Press. The three European nations on Sunday said they “continuously made every effort to avoid triggering snapback.” But Iran “has not authorized IAEA inspectors to regain access to Iran’s nuclear sites, nor has it produced and transmitted to the IAEA a report accounting for its stockpile of high-enriched uranium.”
Meanwhile, the Iranian government has begun to release data the cache of classified Israeli nuclear and military documents that is acquired, writes The Craddle. “Iranian intelligence operatives carried out one of the most complex multilayered operations, penetrated deep into the hidden vaults of the regime and obtained its secret information in nuclear, military, intelligence, and scientific fields,” he added. “In addition, there are documents showing official influence exerted by Israeli officials and American senators on the International Atomic Energy Agency (IAEA), and their receipt of information about our peaceful nuclear program.” EPM notes this move should be understood as an effort to “expose” the US-led efforts to punish Iran for its nuclear program as being hypocritical and a cover for an attempt at regime change.
As to Ukraine, during a press moment surrounding his address at the UN General Assembly Russia’s foreign minister Sergey Lavrov made clear that Russia has no intention of letting itself be pushed in a specific course of action by sanctions or material support for Ukraine from western countries. Following US president Trump’s 180-degree turn on Ukraine last week, Lavrov said he believes the US will continue to support Ukraine and substitute diplomacy with sanctions, writes The Associated Press. Bu, he added, “This is a path without any promise. It won’t succeed,” indicating Russia is not swayed by it.
As to the current European narrative that Russia is “testing” NATO defenses and willingness to fight, as it is preparing for an invasion, which we published over the weekend. Today, The Associated Press writes that during his speech at the UN General Assembly Russia’s foreign minister Sergey Lavrov also denied doing the things the European is accusing Russia of. He said “Russia has never had and does not have any such intentions” of attacking European or NATO countries. “However, any aggression against my country will be met with a decisive response. There should be no doubt about this among those in NATO and the EU,” Lavrov added. EPM notes that this statement highlights the danger in the current European narrative. A more aggressive stance towards Russia, be it in the form of a no-fly zone over western Ukraine or a shooting down of Russian jet fighters over European territories, is very likely to lead to an escalation of the Ukraine war to EU and NATO territory.
Macroeconomics
US personal consumption continued to grow during the third quarter, writes Axios. Expenditure rose 0.6% in August, or 0.4% adjusted for inflation. Based on this data, The Atlanta Fed now sees a 3.9% rate of US GDP growth for the third quarter. It follows on the heels of revisions to second quarter GDP, released last week, that showed much stronger consumer spending in the April through June quarter than first estimated, and a 3.8% pace of growth. Axios does note that strong averages are made up of booming spending by the wealthier segments of US society, while the middle and lower classes are holding back as they have to deal with the impact of tariff driven price increases.
As to the Trump Tariff War, South Korea has reiterated its position that is unable to pay $350 billion in “upfront investments” in return for lower tariffs, writes Nikkei Asia. US president Trump in remarks this week said South Korea would provide the investment “upfront,” despite Seoul’s contention that kind of outlay could plunge Asia’s fourth-largest economy into a financial crisis. “The position we’re talking about is not a negotiating tactic, but rather, it is objectively and realistically not a level we are able to handle,” South Korea’s National Security Adviser Wi Sung-lac said. “We are not able to pay $350 billion in cash,” he said.
Energy
OPEC+ will likely approve another oil production increase of at least 137,000 barrels per day at its meeting next Sunday, writes Reuters. Eight OPEC+ countries will hold an online meeting on October 5 to decide on November output, and will discuss a proposal to increase production by 137,000 bpd, equal to the October hike, Reuter’s sources said.
BP has reached a final investment decision on the $5 billion Tiber-Guadalupe project off the US Gulf coast, writes Bloomberg. The offshore platform is key to BP’s plan to exceed the equivalent of 400,000 barrels a day of output capacity in the region by the end of the decade. The offshore production hub, to be fully owned and operated by BP, is one of the company’s eight to 10 largest global projects expected to start up by the end of the decade. It includes six wells in the Tiber field and a two-well tieback from the Guadalupe field. The Tiber platform will have a production capacity of 80,000 barrels of oil per day.
Technology
Huawei is preparing to sharply ramp up production of its most advanced artificial intelligence chips over the next year, writes Bloomberg. The Chinese company plans to make about 600,000 of its marquee 910C Ascend chips next year, roughly double this year’s level. Overall, the Shenzhen-based company will raise output for its Ascend product line in 2026 to as many as 1.6 million dies (the basic silicon components that house chip circuitry). If Huawei can hit those targets, it would represent a technical breakthrough, as it suggests Huawei and main partner Semiconductor Manufacturing International Corporation have found a way to relieve some of the bottlenecks that’ve hindered their production.