What We’re Watching – The weak spot in the US–Israel Alliance

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 situation in Syria, and what it reveals about the weak spot in the US – Israel Alliance.

An attack over the weekend on US troops stationed in Syria’s south-eastern desert brought back into focus the policy disagreement between the US and Israel when it comes to Damascus. The US wants Israel to support Al Sharaa. Israel wants a bigger landgrab such that Syria will forever submit to it.

The independence of Israel on this subject was on display, as it used its contacts in US media to highlight its point of view to the American public. The US was forced to respond through a media campaign to the Israeli public, to showcase its point of view.

3W notes the US response, targeting not the American public but the Israel public, indicates that Israel has significant influence over American policymaking. American policymakers need to get Israel on board with their plans, rather than the other way around.

This is an important weak spot in the US – Israel Alliance, 3W notes, as this is an embarrassing situation for America, and one many in the American public refuses to accept.

Furthermore, we look at:

• Israel’s continued military attacks on Gaza and Lebanon, as if it had not signed up to a ceasefire agreement
• Ukraine continued resistance to the US – Russia proposed peace plan
• The continued fighting between Thailand and Cambodia
• Why OpenAI is already “too big to fail” for the US economy
• How Ukraine’s attacks on the Russian seaport of Novorossiysk have affected Kazakhstan’s ability to export its crude, and has strengthened calls for the country to lessen its dependency on Russia in this regard
• The clear signs a supply glut is forming in the crude oil market

Geopolitics

As to Gaza, in another attack during the so-called ceasefire, Israel killed a Hamas commander, Raed Saad, writes The Associated Press. The attack killed a further 3 people, and wounded 4 more. Hamas sources have described Saed as the second-in-command of the group’s armed wing, after Izzeldeen Al-Hadad, writes Reuters, which adds that an Israel-allied Palestinian group, the so-called Popular Forces, and which are based in the Israeli-occupied sector of Gaza, killed Ahmed Zamzam, a senior officer in a Hamas-run internal security service tasked with fighting collaboration with Israel.

As to Lebanon, the Israeli army staged new attacks there on Sunday, killing at least two people, writes The National. Hezbollah has so far held back from retaliation. But at a meeting in Iran on Sunday with an adviser to Iranian supreme leader Ayatollah Ali Khamenei, Hezbollah representative Abdallah Safieddine hinted that could change. “Referring to repeated Israeli violations of the ceasefire, Safieddine warned that Hezbollah will deliver a crushing response whenever it decides to do so”, Iranian state media said. Mr Safieddine also said the group would not lay down its arms.

In the 3W view, the Israeli attacks in Gaza and Lebanon highlight, again, what a “ceasefire” with the US – Israel Alliance really means: “You lay down your arms, we keep on attacking and killing you”.

As to Syria, two US service members and one American civilian, an interpreter, were killed in an attack on a US army base in Syria, writes The Associated Press. Three further US service members were injured in the same attack, as well as a number of Syrian security forces. The Pentagon and a senior Syrian official said the soldiers were supporting counterterrorism operations when they came under fire in Palmyra, a city in the country’s central desert region once held by the extremist group, writes The National. The attack took place during a visit by US troops to an office used by the country’s internal security forces. The attacker was apparently a lone gunmen, who was himself a member of the newly formed Syrian security forces there. Syrian authorities are looking into whether the gunman was an IS member or only carried its extreme ideology. What is noteworthy, in the 3W view, is that US officials are trying to shield Syrian president Al Sharaa against any negative consequences of the attack. “This attack took place in an area where the Syrian President does not have control”, US officials told AP. This indicates, in our 3W view, the closeness between the US and Al Sharaa, and the importance the US attaches to him with regard to the US plans for Syria.

3W further notes the development comes at a conspicuous moment. The US has pressuring Israel to adjust its policy towards Syria and align it with the US. Israel has resisted building relations with Al Sharaa, namely, and instead opted for an aggressive stance targeting establishment of a permanent military presence inside Syria, under the guise of “protecting the Druze”, that would give Israel a dominant position over Syria, writes The Soufan Center. From this dominant position Israel then wants to enter the Abraham Accord negotiations that the US aspires to, in order to get more concessions from Damascus.

Israel is pushing back as hard as it can. Last week, The Wall Street Journal provided Israel with a platform to set out their reasoning as to why the Israeli plan for Syria is better than the US plan. Israel simply needs a dominant military position inside Syria, they say, to prevent an “October 7” type of attack on their country from originating there. In addition, Israel’s foreign minister went on record saying that the disagreements between Israel and Syria as far as the Abraham Accords are concerned are widening, according to Ha’aretz, which according to 3W is an attempt to paint Israel as “the helpless victim”.

The US felt compelled to push back against the Israeli narrative. It deployed its ambassador to Turkiye, Tom Barrack, who also acts a special envoy for Syria, to deliver the message that Syria under Al Sharaa is not a threat to Israel. In an interview with The Jerusalem Post, Barrack said “Syria is fundamentally disinterested in aggression toward Israel, consumed instead by threats from ISIS, foreign fighters, and Iranian proxies.” Barrack further noted that “Syria has no alternative path [besides an Abraham Accord], and neither does Israel if it wants to avoid perpetual military confrontation on every border.” Barrack also said that the US offers to guarantee Israel’s security, if it goes along with the US plan for Syria, and he urged Israel to allow Turkiye to more actively support the US – Israel Alliance plan for the “New Levant”. Normalization between Israel and Turkiye “just makes too much strategic sense,” Barrack said.

As to Ukraine, German chancellor Friedrich Merz joined Ukrainian president Volodimir Zelenskyy for talks with US special envoy Steve Witkoff and Jared Kushner, writes The Associated Press. Merz represented the European efforts to support Ukraine, led by Germany, France and the UK.  During the meeting Zelenskyy stressed he is willing to drop his bid for Ukraine to join NATO, if in return the US provides security guarantees via a formal treaty ratified by the US Congress. He said he is unwilling to discuss territorial exchanges. 3W notes that this leaves the peace talks in a deadlock. Underpinning the issue is the European belief that Russia is a mortal enemy, that is has plan to conquer Europe, and that Ukraine is just the first war it wants to fight to achieve this. If that sounds nonsensical to you, that’s probably because that is what it is. But it is the basis for European thinking and consequently actions on the ground. As a result, the current deadlock will remain, until the Ukrainian army implodes under the sustained Russian pressure, or until the US forces a solution upon Ukraine – which it has the ability to do.

As to the Thailand – Cambodia conflict, US president Trump spoke to Thai Prime Minister Anutin Charnvirakul and Cambodian Prime Minister Hun Manet last week to restore the ceasefire, writes The Associated Press. Hun Manet said he held phone conversations on Friday night with Trump, and a night earlier with Malaysia’s Prime Minister Anwar Ibrahim, and thanked both “for their continuous efforts to achieve a long-lasting peace between Cambodia and Thailand.” However, Thai Prime Minister Anutin denied that his country was even in negotiations over the proposal. As a result, fighting has continued over the weekend.

Macroeconomics

OpenAI is at the root of the US AI bubble, writes Axios. If it falls, it would take the entire US IT sector with it. Companies are building datacenters and bulking up on semiconductors all in the anticipation that OpenAI will deliver. All these “promises to buy” are collateral for loans to pay for billions of investments in the wider AI ecosystem. An OpenAI crisis, under competitive pressure or a reassessment of the potential of AI, could therefore trigger a significant disruption of the US economy. A crash in investment as well as a financial crisis as the OpenAI associated debt would suddenly drop in value.

Energy

The damage caused by the Ukrainian naval drone that struck the offshore loading terminal of the Caspian Pipeline Consortium near the Russian port city of Novorossiysk, is likely to take 1 year to repair, writes Nikkei Asia. Roughly 80% of Kazakh crude exports flow through this Russian port on the Black Sea. In response, the Kazakh government announced on Wednesday that state-owned KazTransOil will reroute crude oil exports from the CPC system to other pipelines as well as directly to China. Some Kazakh crude was diverted through the Baku-Tbilisi-Ceyhan pipeline, but this detour is nearly three times more expensive, industry sources say, due to additional trans-Caspian shipping and reloading. Other options are no sufficient to make up for the loss of the Novorossiysk port. NA notes that Kazakhstan had already been dealing with calls for diversification away from reliance on Russia before the attack, and that these calls have grown louder since.

The premium of Abu Dhabi’s flagship Murban over Brent has declined to the narrowest since early October, writes Bloomberg. The shift signals concern too much crude is being offered in the Middle East than can readily be bought by refiners in Asia. Reflecting the abundant availability of near-term supplies, state producer Saudi Aramco recently cut the price of its flagship crude grade for Asia to the lowest level in five years. Other markers in the Middle East are also flashing weakness. Upper Zakum and Oman had a 50- to 60-cent premium to Dubai at the end of last week, down from about 90 cents at the start of the month.