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📰 A new AI treaty

📰 A new AI treaty

and OPEC delays production increase plan

Ross Crabtree & Billy Robinson
September 07, 2024

Hello and welcome to Geopolitics Daily,

In today's headlines, oil takes centre stage as Libya's production plunges by 60% amidst new conflict, while OPEC delays a planned increase.

Meanwhile, the U.S. and its allies have signed an international AI treaty, and Beijing pledges $50 billion in African investments.

Additionally, Japan and Australia have formalised a new security pact.

More details below ⤵️

Top 5 Stories

1️⃣ 🇺🇸 🇪🇺 🇬🇧 US & allies sign international AI treaty: The EU, US, and UK are among the nations that signed the first international legally binding treaty addressing AI risks, the Council of Europe announced Thursday. The Council of Europe Framework Convention on Artificial Intelligence, Human Rights, Democracy, and the Rule of Law was opened for signature at a justice ministers' conference in Vilnius, Lithuania. This treaty aims to ensure AI use aligns with human rights, democracy, and the rule of law. Signatories include Andorra, Georgia, Iceland, Norway, Moldova, San Marino, the UK, Israel, the US, and the EU. Council of Europe Secretary General Marija Pejcinovic Buric emphasised the importance of AI adhering to global standards, noting the treaty's balanced text, drafted through an inclusive process. She expressed hope that more countries will sign and ratify the treaty soon, allowing it to take effect.

2️⃣ 🇮🇱 🇵🇸 Netanyahu plays down likelihood of a ceasefire deal: Israeli Prime Minister Benjamin Netanyahu stated Thursday that a cease-fire and hostage release agreement is “not close,” as both sides remain divided on key issues, including Israel's military presence in Gaza. “Hamas is not ready for a deal. There’s no deal in sight,” Netanyahu said in an interview. “They want to rebuild their terror regime, and unfortunately, it's far from happening.” Meanwhile, bombs continue to rain down on civilians and civilian infrastructure in Gaza, and the Israelis protest the government's inability to strike a hostage deal. Israel and Hamas are particularly at odds over the Philadelphi Corridor, a narrow land strip along Egypt's border, which Israeli forces captured in May. Netanyahu insists on retaining control, while Hamas demands their withdrawal.

3️⃣ 🇰🇿 🇮🇶 OPEC delays production increase plan: OPEC+ members have postponed a planned increase of 180,000 barrels per day in October, part of a strategy to gradually return 2.2 million barrels per day to the market in the coming months. The 2.2 million bpd reduction was a voluntary short-term cut by eight alliance members. Two OPEC+ sources, speaking anonymously due to the sensitive nature of the discussions, confirmed the two-month delay in production hikes. Oil prices have been pressured by sluggish post-COVID-19 demand recovery in China, the world's second-largest economy and top crude importer. On the supply side, Iraq and Kazakhstan—key OPEC+ members—have consistently exceeded their production quotas and plan additional output cuts to balance these overages by September 2025. Meanwhile, disruptions in Libya's oil production, which stands at nearly 1.2 million bpd, further complicate the market outlook, as uncertainty looms over whether the country’s political crisis will be resolved soon or persist long term.

4️⃣ 🇲🇾 🇨🇳 Malaysia and China at odds over South China Sea oil exploration plans: Prime Minister Anwar Ibrahim stated Thursday that Malaysia will not yield to China's demands to halt its oil and gas exploration in the South China Sea, affirming that the activities are within Malaysia's territorial waters. Anwar emphasised that Malaysia would maintain its position despite China's protest in February, which accused Kuala Lumpur of infringing on Chinese territory. Malaysia’s Foreign Ministry is investigating the recent leak of the diplomatic protest note, which was published by a Filipino news outlet on August 29. "We have no intention of being provocative or hostile. China is a close friend, but we must secure our economic interests, including drilling for oil in our waters," Anwar said during a televised news conference from Russia, where he is on an official visit. Several nations, including Vietnam, Brunei, Malaysia, the Philippines, and Taiwan, contest Beijing's broad claims over the South China Sea. While Malaysia prefers diplomatic engagement and avoids public confrontations with China—unlike the Philippines—it remains vigilant, as Chinese coast guard ships have occasionally entered its waters. Malaysia is also mindful of its strong economic ties, with China being its largest trading partner since 2009.

5️⃣ 🇨🇳 Beijing promises $50 billion investment in Africa: Chinese President Xi Jinping on Thursday committed over $50 billion in financing for Africa over the next three years, with a focus on infrastructure and trade cooperation. Speaking at Beijing's largest summit since the pandemic, Xi addressed more than 50 African leaders and UN Secretary-General Antonio Guterres at the China-Africa forum. African leaders have already secured multiple agreements this week, spanning infrastructure, agriculture, mining, trade, and energy. Xi called this period the "best" in China-Africa relations, expressing China's readiness to enhance collaboration in key sectors. He announced that the $50.7 billion in funding will be split between credit, $11 billion in various forms of assistance, and $10 billion through Chinese investments. Xi also pledged to help create at least one million jobs across Africa. UN chief Guterres praised the growing partnership, highlighting China's development success as a model that could help drive Africa's renewable energy future.

Major Story

🇱🇾 LIBYA'S OIL OUTPUT SLASHED BY 60% AS NEW CONFLICT TRIGGERS SHUTDOWN

Since the fall of Muammar Gaddafi in 2011, Libya’s oil production has been repeatedly disrupted by ongoing conflicts between rival factions. The latest shutdown, triggered by efforts to oust Central Bank Governor Sadiq al-Kabir, has slashed the country's oil output by over 60%, reminiscent of the 2020 blockade that lasted eight months and led to significant revenue losses.

Before Gaddafi's ousting, Libya consistently produced around 1.65 million barrels per day (bpd) of high-quality oil, with plans to increase production through enhanced recovery techniques. However, the power vacuum created after his removal led to fierce competition among factions vying for control over the country’s vast oil wealth. By 2020, two main blocs emerged: General Khalifa Haftar’s Libyan National Army (LNA) and the then-UN-recognized Government of National Accord (GNA). A blockade of oil fields from January to September 2020 cost Libya nearly $10 billion in lost revenues, with Haftar pushing for a more equitable distribution of oil revenue among the factions.

Despite agreements to address revenue-sharing issues, Libya continues to experience oil shutdowns. Recent closures are tied to escalating tensions between Haftar’s LNA in the east, which controls key oil fields, and the internationally recognized Government of National Unity (GNU) in Tripoli. Haftar opposes the removal of al-Kabir, while the GNU, led by Prime Minister Abdul Hamid Dbeibah, seeks his dismissal. In late August, the rival Government of National Stability (GNS) announced a "force majeure" on oil production in the eastern and southern regions, leading to significant declines in output, with fields like the 70,000 bpd El-Feel field going offline.

Libya’s crude oil production, which averaged 1.15 million bpd in July, is now down by more than half, with no clear resolution in sight. Given the complex and shifting dynamics, this latest shutdown could mirror the prolonged 2020 blockade, further destabilising the country’s oil-dependent economy.

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Other News

1️⃣ 🇺🇸 🇳🇮 Washington secure release of 135 political prisoners in Nicaragua: The United States has facilitated the release of 135 political prisoners from Nicaragua, including students and members of a religious group, US National Security Adviser Jake Sullivan announced on Thursday. These individuals were part of a broader crackdown by President Daniel Ortega’s government, which has targeted thousands of Nicaraguans in recent years. The prisoners were flown to Guatemala, with the option to relocate to the US, according to Sullivan. Guatemalan President Bernardo Arevalo’s office confirmed their arrival early Thursday. “No one should be jailed for peacefully exercising their rights to free expression, association, or religious practice,” Sullivan stated.

2️⃣ 🇯🇵 🇦🇺 Japan, Australia pen security pact: Japan and Australia have agreed to expand joint military training exercises, with government ministers expressing shared concerns over China's recent activities in Japanese airspace and territorial waters. Japanese Foreign Minister Yoko Kamikawa and Defense Minister Minoru Kihara met with their Australian counterparts, Foreign Minister Penny Wong and Defense Minister Richard Marles, in Queenscliff, Australia, for a regular summit. Discussions focused on enhancing security cooperation, particularly regarding peace and stability in the Taiwan Strait and China’s growing territorial assertiveness in the South and East China Seas, Wong noted. The ministers committed to increased training engagements between their air forces, building on last year’s Exercise Bushido Guardian, where F-35A Lightning II fighters from both nations conducted combat drills over Japan.