Global SITREP for Wednesday, 27 December 2023 – Forward Observer

Global SITREP for Wednesday, 27 December 2023

Good morning, and welcome to the Global Situation Report for Wednesday, 27 December 2023

  1. OIL, WHEAT PRICES JUMP ON GLOBAL SHIPPING FEARS: Oil and wheat prices increased yesterday after Ukraine destroyed the Russian landing ship Novocherkassk in Crimea with cruise missiles.
  • Brent crude oil futures climbed 2.5% yesterday, following last week’s gains of about 3% after Houthi attacks on ships in the Red Sea.
  • Wheat futures jumped 3% yesterday on rising global shipping risks.

Why It Matters: Global shipping leader Maersk announced on Sunday that they are restarting Red Sea shipping routes, and France’s CMA CGM is following suit, they announced yesterday. However, commodity traders are still concerned about the global transit security of oil and other goods. Another series of Houthi attacks in the Red Sea, more Ukrainian-Russian naval conflicts in the Black Sea, or another development could stress supply chains, pushing up commodity prices in 2024. – H.B.

  1. U.S.-CHINA SPIRALING SANCTIONS COUNTER OTHER PROGRESS:The United States and China are further sanctioning their counterpart’s citizens.
  • The U.S. sanctioned two individuals and three companies for human rights abuses against the Uhygers.
  • China sanctioned a research company, its executive, and a former defense researcher for espionage as a response to the U.S. sanctions.

Why It Matters: Despite warming relations in the defense sector, the overall relationship between the two superpowers is cooling, and sanctions are piling. This appears to be a downward spiral that we cannot pull ourselves out of. I expect further disintegration of relations as President Biden will need some evidence that he is “tough on China” for his foreign policy platform since they are the primary adversary. – J.V.

  1. CHINA APPOINTS SUBMARINER AS HEAD OF NAVY: Chinese President Xi Jinping appointed career submariner Hu Zhingming to head the People’s Liberation Army Navy (PLAN).

Why It Matters: Submarine warfare is a critical weakness in China’s navy. Appointing a career submariner will help direct the PLAN to bolster submarine warfare and their anti-submarine warfare capabilities. However, even with China’s impressive shipbuilding industries, this will take several years to build submarines and properly train a submarine warfare cadre. – J.V.

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.

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