Politics, Geopolitics & Conflict
The purge in Turkey is continuing and gathering pace, as it expands into more industries. Last week, President Erdogan shut down more than 100 news outlets, major and minor alike, and removed the head of Petkim – the country’s largest refiner and a subsidiary of Azerbaijan’s state oil company SOCAR. Confidence in Turkey’s economy will deteriorate quickly, though Erdogan appears to have no qualms about this. He is now working to restoring Turkey’s connections with Russia, which started with his apology for the downing of a Russian military place last year and now continues with the arrest of two officers responsible for it.
The Kremlin sided with Erdogan over the coup and this has been recognized quite vocally by Ankara. Turkey shows no regard whatsoever for its European allies. He also has no regard for Washington, which he accuses of having been behind the coup. The key takeaway here is that a geopolitical realignment is in the works, and Turkey is looking eastward, to Russia. A new axis of Russia, Iran and Turkey is emerging and the spoils of the Middle East are on the table, beginning with the Syrian playground. Turkey will also be more heavily courting China.
Meanwhile, none other than Saudi Arabia is courting Russia, one of its two biggest rivals on global – more specifically Asian – oil markets. Realizing the threat of an Ankara-Moscow-Tehran axis, Riyadh has promised Russia increased influence in the Middle East, more or less a restoration of the balance of powers in the region from the time of the Soviet Union. Some observers, however, believe this is a scenario aimed to lure Moscow into a trap, with all the promised contracts and a quick rebalancing of the oil market in favor of Russia to be retracted as soon as Russia agrees to them. The very fact of agreeing will put Russia at odds with its current allies in the Middles East, Iran and Syria, which is what Riyadh wants, eventually undermining the influence of both Russia and Iran in the Middle East and reinforcing its own.
The situation in this part of the world is likely to remain extremely dynamic in the near term, and any change in the current balance of power, however slight, will have global reverberations.
Deals, Mergers & Acquisitions
• Chevron is planning to up to $5 billion in assets in Asia to raise cash, with sales set to being this month. The focus will be on…