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Welcome to The Geopolity’s What We’re Watching (3W), our daily look at the interconnected worlds of Geopolitics, Economics and Energy. 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 take a closer look at the visit of Saudi crown prince Mohammed bin Salman to US president Trump.
Under the leadership of MBS the Saudi’s are seeking to become an “indispensable partner” for the US, for which reason MBS offered to give the US everything it wanted – for a value of $1 trillion – in return for a defense treaty.
He got what he wanted, although the treaty is likely to be by executive order only, meaning the US can rescind it at any time it wants in the future. 3W notes this should lay to rest the fantasy that Saudi is an independent actor in Middle Eastern geopolitical affairs.
Furthermore, we look at:
- Israel’s attack the Ain Al Hilweh refugee camp, Lebanon’s largest Palestinian refugee camp in the southern city of Saida, which killed at least 13 people
- The US accusations that Iran and Russia are collaborating on the development of nuclear weapons
- The secret US – Russia negotiations to end the war in Ukraine
- The Future of Investment and Trade (FIT) Partnership
- US oil majors ExxonMobil and Chevron plan to buy parts of sanctioned Russian oil major Lukoil’s international assets
- The Dutch government decision to suspend its intervention at computer chip maker Nexperia; where 3W explains why this, in our view, is an act equivalent to raising the white flag
- The discussions between the EU and India about the EU’s carbon border adjustment mechanism (CBAM); and the EU efforts to establish a coalition that will push for a plan to “phase out” fossil fuels at COP30
Geopolitics
As to Lebanon, yesterday 3W reiterated our view that the Trump Peace Plan for Gaza is fundamentally about enabling the US – Israel Alliance to shift focus elsewhere. And we noted an increase in Israeli military aggression when it comes to Lebanon that has coincided with the reduction in military violence in Gaza. As if to prove our point, on Tuesday Israel attack Ain Al Hilweh, Lebanon’s largest Palestinian refugee camp, in the southern city of Saida, writes The National. The overcrowded and densely packed Ain Al Hilweh camp has an estimated population of more than 60,000 Palestinian refugees, although the real number is believed to be significantly higher. At least 13 people were killed by Israel’s attack.
The Israeli military said it was targeting a Hamas training site, writes The Financial Times, adding that Israel said it would continue to strike the group in Lebanon. Hamas denied that the target was a training compound, saying Israel had struck a public sports field and that Israel’s claims were “incitement against the camps”. The affair is increasing worries inside Lebanon that Israel is preparing another military attack on the country.
As to Iran, the US has released documents to prove Iran is collaborating with Russia in the nuclear weapons space, writes The Financial Times. Iranian scientists and nuclear experts made a second covert visit to Russia last year, part of a series of exchanges between Russian military research institutes and the Organisation of Defensive Innovation and Research (SPND), an Iranian military-linked unit that the US accuses of leading Iran’s nuclear weapons research, FT says. FT admits the real objective of the meeting is not known, and could have been about civilian nuclear technology. Both Iran and Russia deny collaborating on military nuclear technology, and as such, 3W notes, the FT accusation should be treated cautionary, especially since the source of the information is the US intelligence community. We would also add that considering the behaviour of the US – Israel Alliance in Gaza, in Lebanon, Syria, Yemen, Iran and Qatar; as well as the US behaviour in the Caribbean; an honest person would find it hard to criticize Iran were it to develop nuclear weapons for self-defence purposes.
As to Ukraine, the Trump administration has been secretly working in consultation with Russia to draft a new plan to end the war in Ukraine, writes Axios. The plan’s 28 points fall into four general buckets, sources tell Axios: peace in Ukraine, security guarantees, security in Europe, and future U.S. relations with Russia and Ukraine. Trump’s envoy Steve Witkoff is leading the drafting of the plan and has discussed it extensively with Russian envoy Kirill Dmitriev. Dmitriev spent three days huddled with Witkoff and other members of Trump’s team when he visited Miami from October 24 to 26. Witkoff then discussed the plan with Zelensky’s national security adviser, Rustem Umerov, in a meeting earlier this week in Miami. “It’s happening with the background of Russia definitely having additional successes on the battlefield,” Dmitriev told Axios, contending Moscow’s leverage is growing.
As to Saudi – US relations, US president Trump met with Saudi Crown Prince Mohammed bin Salman on Tuesday. During the meeting MBS pledged to invest $1 trillion in the US, writes The National. MBS said the investment in the US is about the kingdom’s long-term business plans. “We are not creating fake opportunities to please America [or] please President Trump. It’s real opportunities,” Prince Mohammed said. In addition, MBS offered a Saudi entry into the Abraham Accords to president Trump. “We believe having a good relation with all the Middle Eastern countries is a good thing, and we want to be part of the Abraham Accord,” MBS said, according to The National. “But we want also to be sure that we secure a clear path of a two-state solution,” he said.
MBS’s goal in the meeting was to position the kingdom he is likely to rule for decades to come as an indispensable ally, writes Semafor. Hence the offer of billions for the US defense industry, billions more to back US artificial intelligence champions, and further billions for US gas exports and nuclear technology. Riyadh wants Washington to see it as the partner that will enable the US to beat China on everything from AI to security, energy, and critical minerals.
As to the weapons deals sought by the Kingdom, US president Trump on Monday already said that he will approve the sale of F-35s to Saudi Arabia, writes Axios. Israel doesn’t oppose Saudi Arabia getting F-35s, but asked the Trump administration to condition the sale on the kingdom normalizing relations with Israel. 3W notes that the F-35 deploys sophisticated Identification Friend or Foe (IFF) technology, which makes it practically impossible to use the plane against US wishes. Any country that buys it, and does not have the technological ability to (secretly) manipulate this technology, will only be able to operates its planes in line with US wishes.
In addition to planes Saudi Arabia has also offered to buy 300 tanks from the US, writes Axios, which calls it “a massive, long-term commitment — and one that appears to shrug off doubts regarding the tank’s role on the battlefield of the future.”
Further as part of the $1 trillion pledge, Saudi Arabia’s sovereign wealth fund-backed artificial intelligence company Humain will announce a slew of new deals with US firms including Amazon, AMD, xAI, and GlobalAI, writes Semafor. Saudi Arabia is pitching itself to US tech firms as a low-cost compute hub, with its ample land and cheap energy making it an attractive place for hyperscalers to build capacity. Humain’s goal is to make Saudi Arabia the third-largest AI infrastructure provider in the world, behind the US and China.
Saudi Arabia’s national oil company Saudi Aramco, meanwhile, is expected to sign two deals to import US liquefied natural gas, writes Semafor.
During the MBS visit to the White House it was announced that US negotiations with Saudi Arabia on a long-sought nuclear technology-sharing deal have been completed, writes Bloomberg. The declaration signed Tuesday “builds the legal foundation for a decades-long, multi-billion-dollar nuclear energy partnership with the Kingdom; confirms that the United States and American companies will be the Kingdom’s civil nuclear cooperation partners of choice; and ensures that all cooperation will be conducted in a manner consistent with strong nonproliferation standards,” the White House said in a fact sheet. Here 3W notes that China has a significant advantage over the US, or any other western country, in nuclear from a techno-economic perspective. It has been significantly more power plants over the past decade, and has shown an ability to deliver these projects on time and (under) budget. The Saudi desire to work with the US clearly indicates that geopolitics trumps economics in the dealmaking.
Experts have, however, questioned whether Saudi Arabia could finance this commitment amid softening oil prices. Despite geopolitical volatility this year, bearish sentiment has taken hold on growing fears of an oil supply glut as Opec+ increases oil production, writes The National.
Nevertheless, US president Trump on Tuesday said the US was designating Saudi Arabia as a major non-Nato ally and announced the two countries had signed a “historic” defence agreement, writes The National. “We’re taking our military co-operation to even greater heights by formally designating Saudi Arabia as a major, non-Nato ally, which is something that is very important to them,” Trump said. Only 19 other countries have been given the designation.
Semafor notes that the Trump administration’s position on MBS and Saudi Arabia is broadly shared across US elite political circles. Lawmakers from both sides of the US Congress plan to attend a reception with Trump and MBS on Wednesday. House Speaker Mike Johnson invited House leaders, including the top Republicans and Democrats on key House committees, to the reception. Republican Senator Lindsey Graham, a staunch Zionist in US politics, said of MBS, “I think he’s the future of the Mideast”. Democratic representative Greg Meeks, his party’s senior member on the House Foreign Affairs Committee, aligned with Graham as he told Semafor that Saudi Arabia is “essential” to the US’s future in the region.
Macroeconomics
The Future of Investment and Trade (FIT) Partnership, launched in September, held its first in-person ministerial meeting on Tuesday, writes Nikkei Asia. The founding members include Brunei, Chile, Costa Rica, Iceland, Liechtenstein, Morocco, New Zealand, Norway, Panama, Rwanda, Singapore, Switzerland, the United Arab Emirates, and Uruguay – all small- and mid-sized pro-trade countries. Officially the establishment of the group has been in the making for over 2 years, but the Trump Tariff War accelerated developments. The partnership focuses on “[strengthening] the rules-based system” and will “incubate solutions and provide a platform for countries to pilot practical measures to facilitate trade and investment for the benefit of our economies, our businesses and our people.” In the 3W view this reads as an effort to establish an ability to trade outside of the US sphere of control.
Energy
US oil majors ExxonMobil and Chevron are considering buying parts of sanctioned Russian oil major Lukoil’s international assets, writes Reuters. The companies are considering options for Lukoil assets in Kazakhstan, where both the US and the Russian firms have stakes in the Karachaganak and Tengiz fields. Exxon might also study a potential bid for the West Qurna 2 field in Iraq, which is operated by Lukoil and is the Russian firm’s most-prized asset. 3W notes that the sudden interest comes shortly after the US sanctioned Lukoil, forcing the Russian company to sell its international assets in a fire sale.
Technology
The Dutch government said on Wednesday it was suspending its intervention at computer chip maker Nexperia, writes Reuters. Supposedly the decision was taken following “constructive talks with China”. More likely, in the 3W view, is that China’s threat to respond to the measure by banning the export of Nexperia chips from China to the EU, which would cripple the EU’s automobile industry, forced the Dutch apologize and retreat. The ultimate outcome of the rash decision to nationalize Nexperia is therefore likely to be exactly that which the Dutch said they feared. They have clearly communicated to China that China’s assets in the EU are not safe, and will therefore incentivize China to accelerate the relocation of strategy IP and capabilities back to China, away from the EU.
Other
The EU is preparing to reject a demand from India to be exempted from its carbon border tax, writes The Financial Times. The EU carbon border adjustment mechanism — CBAM — aims to level the playing field for European heavy industry, which must buy permits to emit carbon based on market prices, currently about €80 a tonne. EU officials said the Indian idea, under which the country would charge exporters based on value not carbon content, would not incentivise manufacturers to cut greenhouse gas emissions. They also fear setting a precedent because the US and other trading partners are also pushing for exemptions. However, Brussels was prepared to reduce levies on imports covered by CBAM if India introduced a domestic carbon pricing scheme, one of the EU officials said. The Indian government is consulting on whether to do so. FT notes the subject is causing an issue for the trade deal talks currently ongoing between the EU and India.
Meanwhile at COP30, countries from Africa, Asia, Latin America and the Pacific joined with EU member states and the UK to make an impassioned plea for the “transition away from fossil fuels” to be a central outcome of the talks, writes The Guardian. A commitment to “transition away from fossil fuels” was the key outcome of Cop28, held in Dubai in 2023. But several countries, led by Saudi Arabia, subsequently started trying to unpick the resolution. At the climate talks in Baku last year, attempts to follow up and flesh out the resolution failed. This year, the Brazilian hosts refused to put any mention of the “transition away from fossil fuels” on to the official agenda for the conference. There is likely to be stiff opposition to any restatement of the transition away from fossil fuels – from Saudi Arabia and perhaps Russia, Bolivia and other petrostates. The US is not attending COP30.