Weekly briefing 102

The Week in Brief

We’ve reached a point where a strike in the Persian Gulf, a U.S. legal battle over AI, and an Australian mining deal are all part of the exact same equation. The old lines separating national security, supply chain resilience, and tech innovation are completely gone. This week’s brief looks at how the campaign in Iran is driving global inflation and the unprecedented trust crisis between Big Tech and the Pentagon. It’s also becoming clear that "middle powers" aren't waiting for Washington to save them anymore. In this environment, risk management requires a much wider lens.

Geopolitical Dynamics

A. NATO's Middle East Friction: The conflict with Iran is dragging European-U.S. tensions into the open. Spain's Prime Minister is flat-out refusing to let the U.S. use its bases for the Iran campaign. Trump’s response? Threatening to cut trade ties with Madrid, pointing out that they still don't meet the 5% GDP defense spending target. Meanwhile, France is only allowing the U.S. temporary access to a base for defense, and Britain sent aircraft carriers—which Trump dismissed as "too little, too late."

B. Energy Markets: Oil prices are surging to around $100 a barrel (peaking near $120) after strikes on Iranian oil and activity in the Strait of Hormuz, the chokepoint for 20% of the world's oil. To calm the panic, 32 IEA countries are releasing 400 million barrels from emergency reserves. That’s double what they released when the war in Ukraine started. In a rare move to dodge an inflation spike, the U.S. just handed India a 30-day sanctions waiver to buy Russian oil that's already at sea.

C. European Elections: Moscow is weaponizing AI ahead of the April elections. They're running a deepfake campaign in Hungary to prop up PM Orbán against his rival, Magyar. Over in Germany, the Green Party pulled off a surprise win in Baden-Württemberg (the heart of the auto industry), dealing a serious blow to Chancellor Merz’s CDU. Why? Local panic over Chinese EV competition, plus the far-right AfD doubling its power to about 18%.

Security and Threats

A. Iran: The fight is spilling over. Two Iranian UAVs hit neighboring Azerbaijan, prompting Baku to rush troops to the border. NATO also intercepted two Iranian missiles aimed at Turkey (though Tehran denies involvement). Elsewhere, reports suggest the CIA is arming Kurdish militias in Iraq to cross into Iran. Putin congratulated the new Supreme Leader, Mojtaba Khamenei, and Moscow is actively feeding Tehran intel to target U.S. assets. Back in the UK, four people were arrested for spying on the Jewish community for Iran.

B. The Drone Cost-Trap: Iran has launched over 2,000 'Shahed' drones, highlighting a brutal cost asymmetry. A Shahed costs $50,000. An American Patriot interceptor? $3 million. With U.S. air defenses tied up in the Middle East, Washington is now looking to Ukraine for cheap, practical workarounds.

C. AI and the Pentagon: Anthropic is suing the DoD after being flagged as a "supply chain risk." The company says this is pure retaliation for refusing to give the military a blank check to use its tech, citing First Amendment rights and core values. Thirty-seven researchers from rival companies just signed a letter backing them up.

D. Poland: With U.S. reliability in question, the Polish Prime Minister just dropped a bombshell: Warsaw will pursue its own nuclear autonomy.

Economy and Trade

A. Rare Earths: Japan just scored a massive win against China's rare earth monopoly. They signed a 12-year mega-deal with Australia's Lynas for NdPr (critical for EVs), locking in a hard price floor of $110/kg. This is specifically designed to stop China from dumping cheap minerals and bankrupting the competition. Japan is also pouring money into refining operations in Malaysia.

B. Tariffs and Growth: The U.S. Treasury Secretary announced a hike in global protective tariffs to 15% this week, completely bypassing the Supreme Court. Meanwhile, China just set a historically low growth target of 4.5%–5% for 2026. India is taking advantage, easing foreign investment rules—a move that directly benefits China and thaws their icy relationship.

Crises and Upheavals

A. Latin America: Argentina's President Milei is actually showing economic recovery after his shock reforms. In Chile, ultra-conservative José Antonio Kast was sworn in right in the middle of an oil-fueled inflation and currency crisis. The U.S. has reopened diplomatic ties with Venezuela post-Maduro, and Trump is trying to hash out an economic deal with Cuba (which just suffered a massive blackout because of slashed U.S. fuel imports).

B. Elections and Coups: In Nepal, 35-year-old rapper Balendra Shah is on track to win the first post-protest elections on a strict anti-corruption ticket. In Madagascar, coup leader Colonel Randrianirina fired his entire cabinet to hoard power. Youth movements have given him a 72-hour ultimatum to step down or face a national shutdown. Indonesia just banned social media for kids under 16, starting in late March. And in Turkey, the trial against Istanbul's mayor (Erdoğan’s biggest rival) has kicked off. They’re threatening him with over 2,000 years in prison just to knock him out of the 2028 race.

“Surely goodness and mercy shall follow”,

The Geopolitics Lab Team