Good morning. Here’s your Daily Situational Awareness for Wednesday, 16 March 2022. You can receive this daily briefing by signing up at https://forwardobserver.com/daily-sa
TODAY’S BRIEFING:
- Saudi Arabia considers petro-Yuan
- U.S. farms increasing domestic wheat production
- Airline passenger costs rise
- Ukrainian president addresses Congress
- Hazards Warning
UPGRADE TO EARLY WARNING AND GET THESE BRIEFINGS:
- Russia-NATO SITREP: Russian nuclear doctrine
- Indo-Pacific SITREP: Military force posture in the Indo-Pacific
- Far Left Activity Rollup & Outlook
SITUATIONAL AWARENESS
SAUDI ARABIA CONSIDERS PETRO-YUAN: The Yuan jumped to a near record high of 6.387 to the dollar after reports Tuesday that Riyad and Beijing were in talks over pricing oil sales in China’s Yuan. The jump follows a period of intense selling pressure amid a significant slump in Chinese stocks. The offshore Yuan fell as much as 1.1% in the three days leading to March 14. (Analyst Comment: While the U.S. dollar remains the preeminent currency of exchange in foreign financial transactions, the outbreak of the Ukraine war and the swath of sanctions imposed on Russia as a result has brought to the fore questions about alternatives to U.S. currency-based markets. This action signals a growing conversation about alternatives to the U.S. dollar and its future as a reserve currency in nations not aligned with U.S. foreign policy. – M.M.)
U.S. FARMS INCREASE WHEAT PRODUCTION, LIMITED SHORT-TERM RELIEF: Global wheat exports have waned from the Russia-Ukraine conflict as U.S. farms are planting more grain to increase domestic capacity. However, experts doubt that American wheat crop production will provide needed surpluses to alleviate immediate prices as most of the U.S. wheat crop is already planted. Poor harvests from drought conditions will further constrict a full harvest. (AC: The U.S. is the second largest wheat exporter after Russia accounting for 14% of global exports. It is unlikely that increasing U.S. capacity will mitigate rising wheat prices this spring; however, excess production will dampen the effects of long-term Ukrainian agriculture disruption from a prolonged war with Russia. – D.F.)
AIRLINE PRICE RISES & CAPACITY CUTS DUE TO FUEL COSTS: Ed Bastian, CEO of Delta Airlines, said there would be higher ticket prices for passengers due to the rising costs of oil. Fuel surcharges will be added to Delta’s international flights, but price rises will also affect domestic travel. While they have not seen signs of declining U.S. travel, there is caution for how long international conflicts will continue. Major U.S. airlines are also looking to cut passenger capacity this year. (AC: The transportation industry is feeling the increasing effects of oil market disruption from the Russian-Ukraine war. Prolonged price increases will further pressure airline industries to cut capacity as full demand hasn’t recovered to pre-pandemic levels. – D.F.)
UKRAINIAN PRESIDENT ADDRESSES CONGRESS: Ukraine’s President Zelenskyy addressed Congress and asked for a U.S. supported no-fly zone or aircraft and S-300 transfers. He also asked for expanded sanctions against Russians, specifically businesses funding oligarchs. His speech follows similar appeals to the British and Canadian Parliament, where the leader asked for a no-fly zone to be established and asked the Western politicians if they’d like to see a foreign flag raised in their cities. (AC: Zelenskyy’s series of speeches are likely to renew calls by politicians and media outlets for a no-fly zone in Ukraine. U.S. and NATO officials are being pressured into joining the conflict as Russia’s initial invasion failed to meet analyst expectations. As Russia appears disadvantaged, the West risks underestimating Putin’s resolve and willingness to escalate.- D.M.)
HAZARDS WARNING
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