Mission Grey Daily Brief - January 02, 2025
Summary of the Global Situation for Businesses and Investors
The Russia-Ukraine war continues to rage on, with Putin launching a New Year's Day drone attack on Kyiv, North Korean troops joining the fight, and Western countries lifting their ban on Ukraine using long-range missiles to attack targets inside Russia. Meanwhile, Israel is wary of deepening ties between Russia and Iran, which could involve a nuclear program. In Montenegro, several people were killed in a shooting after a bar brawl, and the shooter is still on the run. Thailand's aviation sector is expected to improve in 2025, but the country will need to manage its power supply as the data centre industry grows.
Russia-Ukraine War
The Russia-Ukraine war has been internationalised, with North Korean troops joining the fight and Western countries lifting their ban on Ukraine using long-range missiles to attack targets inside Russia. Russia has been receiving military assistance from Iran and North Korea, while Ukraine has been receiving financial and military assistance from the US, NATO, and the EU. Ukraine has ended a five-year deal that allowed Russian gas to flow to EU states through its pipeline networks, significantly reducing Russian gas imports to the EU. This move will cost Russia billions and impact countries like Moldova, which rely on Russian gas via Ukraine.
Israel-Russia-Iran Relations
Israel is wary of deepening ties between Russia and Iran, which could involve a nuclear program. Russia and Iran have been working together on a nuclear program, and Israel is concerned about the potential implications of this collaboration. Israel has been working to neutralise its enemies, and the deepening ties between Russia and Iran could pose a threat to Israel's security.
Montenegro Shooting
In Montenegro, several people were killed in a shooting after a bar brawl, and the shooter is still on the run. The shooter, identified only by his initials AM, fled the scene armed, and police have dispatched special troops to search for him. The shooting has caused concern among residents, and police have urged them to remain calm and stay indoors.
Thailand's Aviation Sector and Power Supply
Thailand's aviation sector is expected to improve in 2025, but the country will need to manage its power supply as the data centre industry grows. Thailand is seeing a significant increase in power demand as the government pushes the growth of data centres and the cloud service industry. The Board of Investment is supporting investment projects in data centres and cloud services, and Thailand is becoming a regional digital innovation hub. However, data centres are crucial infrastructure for artificial intelligence (AI) technology, and if AI-based tasks continue to grow in Thailand, a huge amount of electricity will be needed to keep the facilities running. One AI-embedded data centre requires between 300 and 1,000 megawatts of electricity, and Thailand will need to find a way to meet this demand while reducing its carbon footprint and ensuring a stable supply.
Further Reading:
Breaking News: Several killed as man opens fire in Montenegro bar - Telangana Today
Consulting the oracles - Bangkok Post
How the wars of 2024 brought together rivals and created enemies - BBC.com
Israel wary as Russia-Iran ties deepen, possibly involving nuclear program - Al-Monitor
Ukraine ends Russian gas pipeline to Europe – but how much will it cost Moscow? - The Independent
Themes around the World:
Nickel Rules Raise Investor Friction
Indonesia’s tighter nickel policies, including a new pricing formula, export changes and stricter mining quotas, are raising costs for foreign operators. Chinese firms warn these measures, alongside higher taxes, are threatening project economics, downstream investment decisions and battery supply-chain planning.
Agribusiness liquidity and storage squeeze
With over 28 million tonnes already harvested and maritime exports constrained, farmers face severe cash-flow stress, up to 10 million tonnes of storage shortfalls, and sharply lower domestic prices, raising bankruptcy risks and reducing near-term agricultural investment.
Banking and payments fragmentation
Sanctions are increasingly focused on financial infrastructure, with the EU adding 32-33 Russian banks and related entities to transaction bans, while the UK sanctioned six more institutions. This intensifies settlement bottlenecks, correspondent banking losses and cross-border payment execution risk.
Global backlash to surplus
US officials are pressing G20 partners to confront China’s record 2025 trade surplus of about $1.189 trillion, seeking broader barriers against Chinese exports. Multilateral pressure could widen trade frictions beyond bilateral channels and reshape market access in export-heavy industries.
Climate damage pressures budget
Heatwaves, wildfires, and drought are creating direct economic losses and fiscal strain. Reporting cites at least 7,300 excess deaths, harvest risks, cleanup costs worth millions, and potential food-price increases, likely complicating budget decisions and raising policy uncertainty for businesses.
Shadow fleet and shipping risks rise
Shipping linked to Russian oil faces growing operational and compliance risk as sanctions target shadow-fleet support services and attacks hit tankers near Black Sea routes. Companies must factor in insurance reluctance, vessel screening, routing complexity, and sanctions-enforcement exposure.
Russian oil dependence and diversification
Russia supplied 30.3% of India’s crude in FY26 and more than 50% in June-July by some estimates, cushioning costs but increasing sanction exposure. Refiners are now diversifying toward West Africa, the Americas and the Gulf, reshaping procurement strategies and freight economics.
US Tariff Pressure Escalates
Washington is considering an additional 7.5% tariff on Chinese goods before the September Xi-Trump meeting, potentially restoring effective duties to about 20%. Combined with forced-labor and overcapacity probes, this raises export uncertainty, pricing risk, and compliance costs for China-linked supply chains.
Domestic offshore energy push
India is accelerating energy-security investment through the ₹84,084-crore Samudra Manthan offshore exploration scheme and by opening 99% of sedimentary basins. This could attract foreign capital and technology while gradually reducing import dependence and geopolitical supply vulnerability.
Monetary Easing and Lira Risk
Turkey’s central bank has resumed one-week repo auctions at a 37% policy rate, while JPMorgan sees room for cuts from September after softer July inflation. Markets now focus on whether easing triggers renewed lira volatility and higher import-cost pressure.
US trade-security linkage intensifies
Washington is tying tariffs, investment pledges and even military exercises together, increasing strategic uncertainty for exporters and investors. Seoul’s delayed follow-through on a $350 billion US investment commitment raises risks of renewed tariff pressure and more politicised bilateral negotiations.
Energy shocks worsening costs
Reporting links France’s fiscal and inflation pressures to Middle East conflict, higher oil prices, and risks around the Strait of Hormuz. For companies, this points to renewed exposure to imported energy costs, transport expenses, and margin pressure across manufacturing and logistics chains.
India-SACU trade talks revived
India and SACU have restarted preferential trade agreement negotiations covering goods, customs procedures and rules of origin. South Africa dominates bilateral flows, while India seeks access for autos, pharmaceuticals and machinery and reliable critical-mineral supplies, creating tariff and sourcing implications for exporters.
Black Sea export corridor disruption
Russian attacks on vessels and ports have sharply curtailed Ukraine’s main maritime trade artery. Grain exports fell 76% year-on-year in August, while Great Odesa ports reportedly lost about $2.17 billion in foreign-exchange revenue in one month, disrupting contracts, shipping schedules, and freight risk calculations.
China-Russia Arctic corridor deepens
The Northern Sea Route is carrying more sanctioned Russian LNG and broader China-Russia trade, with at least six Chinese shipping companies expected to make more than 50 voyages this season. The route offers diversification but raises sanctions, security and environmental exposure.
Market diversification gains urgency
In response to US pressure, Brasília has emphasized defending multilateral channels, opening new markets, and protecting affected sectors through domestic support measures. For international firms, this points to potential shifts in trade routes, partner selection, and government-backed industrial positioning in Brazil.
Election-linked policy volatility rising
Budget stress is colliding with the 2027 presidential campaign, raising the likelihood of abrupt policy shifts. Coverage highlights debate over EU contributions, strategic industry support, and fiscal choices, creating uncertainty for investors assessing France’s medium-term regulatory and macro policy direction.
US-Canada Trade War Escalation
Washington imposed 50% tariffs on $20 billion of Canadian goods under Section 338 after talks collapsed, with Ottawa planning retaliatory measures from September 8. The dispute threatens USMCA review, raises North American input costs, and disrupts integrated autos, metals, and consumer-goods supply chains.
Tariff Authority and Trade Volatility
A Supreme Court ruling struck down tariff use under IEEPA, removing roughly $700 billion in expected customs revenue and forcing alternative tariff measures under the 1974 Trade Act. The shift increases uncertainty for exporters, importers, pricing strategies, and cross-border sourcing decisions.
Private champions policy reshapes investment
Economic reforms under Resolution 68 are shifting support toward large domestic private groups through tax incentives, credit preferences, and access to infrastructure contracts. This could open partnership opportunities, but also alter competitive dynamics, procurement access, and state-business relationships across key sectors.
Gaza ceasefire uncertainty clouds outlook
US-backed Gaza ceasefire efforts remain stalled, with continued Israeli strikes and unresolved terms on Hamas disarmament and withdrawal sequencing. The absence of a diplomatic breakthrough prolongs uncertainty for tourism, consumer demand, project execution, labor availability, and investor risk assessments.
Strategic neutrality in technology
Thailand is maintaining neutrality in the US-China AI rivalry rather than aligning with either bloc. This preserves policy flexibility but may complicate future decisions on semiconductors, data infrastructure, cybersecurity standards, and participation in competing technology supply-chain initiatives.
Defence spending supports industry
UK ministers linked persistent Russian airspace, maritime and cable threats to higher defence spending, targeting 3% of GDP by 2030 and 3.5% by 2035 through NATO commitments. This supports defence manufacturing but may reshape fiscal and procurement priorities.
US-Indonesia Trade Deal Resilience
Jakarta says US transshipment allegations should not derail the signed Agreement on Reciprocal Trade, which is awaiting further Section 301 steps and ratification. For businesses, this preserves prospects for continued US market access, but with greater rules-of-origin and compliance scrutiny.
Hormuz Disruption Hits Trade
Israel’s conflict spillover into the Strait of Hormuz is severely disrupting maritime flows, with traffic reported down 80-92% or to one-fifth of normal. Higher freight, insurance and energy costs are raising import, export and supply-chain risks for Israel-linked trade.
Domestic Hydrocarbon Development Push
Turkey is accelerating domestic oil and gas production, targeting 1 million barrels per day and expanding output in Gabar while testing unconventional drilling in Diyarbakir. Greater local production could improve energy security, though execution and policy risks remain material.
Bureaucratic frictions still matter
Despite investment momentum, foreign businesses continue reporting bureaucratic hurdles and uncertainty in dealings with tax authorities. These operational frictions can delay projects, complicate compliance and raise execution risk, especially for manufacturers scaling quickly in response to global supply-chain diversification trends.
Syria reconstruction opens energy opportunities
Turkey is positioning early in Syria’s energy reconstruction through proposed oil and gas exploration, power transmission and mining cooperation. Planned infrastructure would lift electricity transfer capacity above 800 megawatts, creating openings for contractors, utilities and politically exposed investors.
Mining social licence outranks permits
Recent coverage emphasizes that statutory mining rights alone do not secure operational stability in South Africa. Community mistrust can trigger production disruptions, delayed capital deployment, and reputational damage, making stakeholder engagement, equitable local value sharing, and labor relations central to mining investment decisions.
Industrial Reshoring Through Tariffs
US negotiators are explicitly using tariffs to push reindustrialization, pressing partners to open markets, invest in the United States, and shift production southward. This favors domestic manufacturing projects but raises cost pressure for multinational firms reliant on established cross-border production networks.
US tariff and sanctions exposure
India faces escalating US trade-policy risk from a 10% Section 301 tariff, possible further excess-capacity measures, and a Senate bill allowing tariffs up to 100% on major Russian-oil buyers, directly affecting exporters’ pricing, market access, and investment planning.
Trade access remains politically constrained
Coverage on CPTPP highlights that Taiwan’s accession remains blocked less by economic standards than by political and sovereignty disputes. The deadlock limits prospects for rule-based trade expansion and keeps uncertainty elevated for firms assessing Taiwan’s long-term external market access.
Financial sanctions widen payment risk
New US sanctions target Shahr Bank, exchange houses and shell companies in Dubai, Hong Kong and Singapore, while crypto platforms were blacklisted for laundering billions. Cross-border payments, trade settlement, correspondent banking and counterparty screening risks are therefore rising materially.
Eskom restructuring legal contest
Eskom’s planned transmission unbundling is encountering union litigation risk, with NUM warning that transferring about R100 billion of assets could weaken liquidity. For investors and operators, the dispute clouds electricity-market reform timing, tariff trajectories and power-sector counterpart stability.
Climate Shocks Hit Agriculture
Heatwaves, drought and wildfires are already damaging harvests, raising prospects of higher food prices and emergency farm support. With at least 7,300 excess deaths and major fires in Gironde and Var, climate disruption is becoming a direct operational risk.
Iran-Oman corridor reshapes logistics
Iran and Oman are close to a memorandum on new shipping lanes and maritime management in Hormuz, but implementation remains conditional and politically sensitive. Businesses should expect revised routing protocols, clearance procedures and possible new operating costs across Gulf trade lanes.