Mission Grey Daily Brief - January 20, 2025
Summary of the Global Situation for Businesses and Investors
The global business landscape is witnessing a geopolitical and economic maelstrom, with rising tensions and uncertainties casting a shadow over international markets. As geopolitical dynamics shift, investors and businesses must navigate a complex terrain marked by escalating conflicts, shifting alliances, and volatile markets. From the energy sector's geopolitical competition in Nigeria to the stalemate in the Russia-Ukraine war, the global economy is poised for a tumultuous year. Meanwhile, North Korea's warnings over South Korea's drills with the US and Japan and the Sudan refugee crisis displacing over 840,000 people to South Sudan underscore the fragility of regional stability. As geopolitical fault lines realign, businesses must adapt and mitigate risks to safeguard their interests.
Nigeria's Energy Sector: A Geopolitical Battleground
The energy sector in Nigeria, Africa's largest economy, is a geopolitical hotspot with global implications. As a key member of OPEC, Nigeria wields significant influence over global oil prices. Its vast oil and gas reserves, strategic location, and growing renewables sector make it a critical player in the international energy market. However, this strategic position has attracted intense competition between Western energy giants and Chinese state-owned enterprises. While Western companies like Shell, Chevron, and TotalEnergy have a long-standing presence, Chinese firms are gaining ground through partnerships, investments, and infrastructure projects. This geopolitical contest is further complicated by domestic challenges such as corruption, local content laws, and environmental concerns.
For businesses, the Nigerian energy sector presents both opportunities and risks. On the one hand, Nigeria's rich resources, growing middle class, and dynamic population offer lucrative investment prospects. On the other hand, geopolitical tensions, regulatory barriers, and domestic instability could pose significant challenges. Businesses should closely monitor the evolving geopolitical landscape in Nigeria, assess the risks and opportunities, and develop strategies to navigate this complex environment.
Russia-Ukraine War: A Stalemate with Global Implications
The Russia-Ukraine war, now in its third year, has reached a stalemate, with no end in sight. Russia currently holds about a fifth of internationally recognized Ukrainian land, and both sides are engaged in a war of attrition, with daily aerial strikes, drone attacks, and missile launches. The destruction in Ukraine is extraordinary, and it will take a generation to rebuild.
The war has significant implications for the global economy, particularly in the energy sector. Russia's energy exports are a key source of revenue for the country, and sanctions on these exports could be used as leverage in negotiations to end the war. However, the war has also disrupted global energy markets, driving up prices and creating supply chain issues.
Businesses should monitor the situation closely, assessing the potential impact on their operations and supply chains. They should also consider the potential for further sanctions and their impact on energy markets.
North Korea's Warnings: A Regional Flashpoint
North Korea has issued warnings over South Korea's military drills with the US and Japan, threatening stronger action if the drills continue. This escalation in tensions raises concerns about regional stability and potential conflict.
For businesses, the situation in North Korea and South Korea presents significant risks. The potential for conflict could disrupt supply chains, impact markets, and create geopolitical instability in the region. Businesses should closely monitor the situation, assess the potential impact on their operations, and develop contingency plans to mitigate risks.
Sudan's Civil War: A Humanitarian Crisis with Global Implications
The civil war in Sudan has claimed tens of thousands of lives and displaced millions, with half of the population driven into hunger. The US has imposed sanctions on Sudan's military leader, Abdel Fattah al-Burhan, accusing him of prolonging the conflict and committing war crimes. The sanctions freeze Burhan's US assets and restrict American dealings with him.
The war has created a humanitarian crisis, with over 840,000 people fleeing to South Sudan as refugees. This mass displacement has regional implications, straining resources and creating social and economic challenges.
Businesses with operations or supply chains in the region should monitor the situation closely, assessing the potential impact on their activities. They should also consider the potential for further sanctions and their impact on regional stability and business operations.
Further Reading:
Iran-Azeri Ties Tested, Sudan Leaders Sanctioned - Energy Intelligence
North Korea warns of stronger action over South's drills with US, Japan - Citizentribune
Norway’s Latest Round Sees No Rush for Barents Sea Blocks - Energy Intelligence
Sudan refugee crisis: 840,000 displaced to neighboring south Sudan - Townsville Bulletin
The high-stakes interplay between global business and geopolitics in Nigeria - Punch Newspapers
Trump's CIA pick warns of Iran nuclear advancements in confirmation hearing - Al-Monitor
Trump's pick for top diplomat calls for ceasefire in Russia’s war on Ukraine - VOA Asia
US Imposes Sanctions On Sudan’s Leader Abdel Fattah al-Burhan Amid Ongoing Civil War - Arise News
Themes around the World:
Technological Innovation in Battery Reuse
French firms and startups are advancing second-life battery technologies, including hydrometallurgical recycling and smart energy management. These innovations improve recovery rates, reduce environmental impact, and enhance competitiveness in international trade and investment.
Semiconductor Industry Expansion and Resilience
Massive investments, including TSMC’s Kumamoto project, are transforming Japan’s semiconductor sector, with 6.2 trillion yen projected by 2030. This shift, driven by AI demand and 'de-China' strategies, positions Japan as a key global hub, attracting supply chain partners and foreign capital.
Regulatory Reform Accelerates Modular Growth
Recent changes in state building codes, especially in NRW and Baden-Württemberg, are streamlining approvals and reducing compliance costs for modular projects. This regulatory shift is expected to boost investment, speed up project timelines, and enhance market attractiveness for international players.
Belt and Road Initiative’s Strategic Pivot
In 2025, China signed a record $213.5 billion in new Belt and Road deals, focusing on energy, mining, and infrastructure, especially in Africa and Central Asia. The initiative now emphasizes both renewables and fossil fuels, raising both opportunity and ESG risk for global investors.
Global Supply Chain Diversification Trend
Amid US-led tariff wars, UK businesses are accelerating efforts to diversify suppliers and markets, particularly towards India and Asia-Pacific. This shift aims to mitigate risks from geopolitical shocks and ensure resilience in critical sectors such as automotive and technology.
Eastern Economic Corridor Bottlenecks
Land shortages, regulatory delays, and infrastructure constraints in the Eastern Economic Corridor (EEC) are stalling high-value investment projects. The government is prioritizing zoning reforms and expanding investment to new regions, directly affecting supply chain planning and industrial expansion.
MSCI Flags Market Transparency Risks
MSCI has frozen Indonesian stock index rebalancing due to transparency and free float concerns, threatening a downgrade from emerging to frontier market status. This could trigger capital outflows, raise financing costs, and undermine investor confidence.
Supply Chain Diversification and Resilience
Brazilian and regional supply chains are undergoing realignment due to geopolitical tensions, climate events, and infrastructure investments. Companies are investing in logistics, digital tools, and nearshoring to mitigate disruption risks and enhance operational reliability across the Americas.
Supply Chain Disruptions Loom
Tariff escalation and potential EU-US trade retaliation threaten to disrupt established supply chains. Finnish manufacturers and technology firms face higher costs, delays, and re-routing challenges, impacting competitiveness and operational planning.
Downstreaming and Industrial Policy Challenges
Indonesia’s downstreaming success in nickel, driven by Chinese investment and favorable market conditions, is difficult to replicate for other minerals like copper. High capital costs and thin margins threaten resource depletion and discourage new exploration, raising concerns about the sustainability of the industrialization model.
Activation of EU Anti-Coercion Instrument
France is leading calls to activate the EU’s anti-coercion instrument in response to US economic pressure. This unprecedented move could trigger retaliatory trade measures, restrict US firms’ access to EU markets, and reshape the legal and operational environment for international businesses.
Stricter Environmental and Import Regulations
New regulations require burn-free certification for feed corn and wheat imports, aligning with global sustainability standards. These rules increase compliance costs for importers and may disrupt agricultural supply chains, especially for animal feed and food processing sectors.
China Remains Pivotal Trade Partner
Despite global tensions, China continues as South Korea’s largest trading partner, with bilateral trade reaching nearly $299 billion in 2025. Ongoing FTA negotiations on services and investment signal deepening economic integration, but also expose Korean firms to geopolitical risks and regulatory shifts.
Escalating Geopolitical and Security Risks
Ongoing conflict in Ukraine, US-Russia tensions, and new US actions against Russian assets have heightened geopolitical risks. These developments threaten supply chain stability, raise compliance costs, and increase the risk of asset seizures or operational disruptions for international businesses in Russia and its partner states.
Robust Foreign Investment Inflows
Brazil attracted record foreign direct investment in 2025, totaling €71.9 billion (3.41% of GDP), driven by strong stock market performance and diversified investor interest. Sustained inflows reinforce Brazil’s position as a key emerging market destination for global capital.
Critical Minerals Investment Surge
Brazil is attracting substantial foreign investment in critical minerals, including rare earths, graphite, and nickel. Strategic partnerships with the US and EU are developing, positioning Brazil as a key supplier for clean energy and technology supply chains, and diversifying away from China.
Ruble Volatility and Financial Policy
The ruble’s real effective exchange rate surged 28% in 2025 due to trade surpluses and high interest rates, reducing inflation but hurting export competitiveness and budget revenues. Currency volatility complicates financial planning, pricing, and investment for international businesses operating in Russia.
Allied Coordination on Resource Security
Australia is collaborating with the US, UK, EU, and regional partners to establish price floors and secure supply chains for critical minerals. This coordinated approach aims to counter China’s market dominance, catalyze investment, and ensure stable access for clean energy and defense industries.
US-Australia Strategic Partnership Deepens
Recent agreements on critical minerals and defense supply chains signal a deepening US-Australia strategic partnership. Joint initiatives aim to counter China’s dominance in key sectors, strengthen Indo-Pacific security, and foster investment in advanced manufacturing and technology.
Supply Chain Resilience and Diversification
The US-Taiwan deal includes mechanisms for ongoing consultation on tariff and supply chain issues, supporting resilience against shocks. Taiwan’s strategy emphasizes global diversification, advanced packaging, and maintaining technological leadership amid rising global competition.
Russia-China Strategic Economic Partnership
Over $100 billion in joint projects with China span minerals, transport, and military technology. China supplies critical components and payment systems, helping Russia bypass sanctions. This deepening partnership shifts Russia’s trade orientation and impacts global supply chains and investment flows.
China-Finland Economic and Tech Cooperation
Finland and China are deepening cooperation in energy transition, technology, and circular economy. Bilateral agreements and Chinese investments in Finnish infrastructure offer growth opportunities but also require careful navigation of regulatory, political, and security considerations.
Escalating Political Instability and Protests
Iran is experiencing its most significant unrest since 1979, with over 2,500 deaths and 18,000 arrests reported. The protests, sparked by economic collapse and currency devaluation, have evolved into direct challenges to the regime, severely impacting business confidence and operational continuity.
Gaza Conflict Drives Regional Instability
The ongoing Gaza conflict, despite a fragile ceasefire, continues to destabilize Israel’s business environment. Persistent violence, humanitarian crises, and unresolved governance issues in Gaza create uncertainty for trade, investment, and supply chain continuity, especially for firms with regional exposure.
Australia-China Trade Tensions Escalate
The Albanese government is considering tariffs and quotas on Chinese steel amid a surge in imports, risking renewed trade hostilities. This move could prompt Chinese retaliation, disrupt bilateral trade, and impact sectors reliant on Chinese inputs or export markets, raising uncertainty for global investors.
Semiconductor Reshoring and Tech Investment
A landmark US-Taiwan trade deal is driving $250 billion in Taiwanese investment into US semiconductor manufacturing, aiming to secure critical supply chains and reduce dependence on Asia. This reshoring effort is central to US industrial and national security strategies.
Currency Volatility and Fiscal Reforms
The South African rand has shown recent strength, supported by improved fiscal management, credit rating upgrades, and inflation control. However, volatility remains a risk, influenced by global economic shifts, policy changes, and domestic fiscal vulnerabilities, affecting import costs and investment planning.
Environmental Enforcement and Permit Revocations
Indonesia has revoked permits for 28 companies, mainly in forestry, mining, and plantations, due to illegal deforestation and environmental violations. This signals stricter enforcement, affecting supply chains and compliance costs for resource-dependent industries.
Sweeping US Sanctions and Oil Restrictions
The US has intensified sanctions on Iran, targeting oil exports and shipping, with new measures including a 25% tariff on countries trading with Iran. These actions have severely restricted Iran's access to global markets, undermined its fiscal stability, and forced key partners like India to reconsider strategic investments such as the Chabahar port.
Global Supply Chain Realignment
China’s supply chains have reallocated through third-party countries like Vietnam and Mexico, maintaining effective access to US and Western markets despite tariffs. This rerouting complicates compliance, origin tracing, and risk management for international businesses.
Geopolitical Realignment and Supply Chain Security
Saudi Arabia is deepening ties with China, the US, and regional partners, while pursuing new defense and economic alliances. These shifts impact energy flows, supply chain resilience, and market access, requiring international businesses to closely monitor evolving geopolitical risks.
Escalating US-China Trade Tensions
The US has maintained high tariffs on Chinese goods, with rates reaching 47.5%, resulting in a 28% drop in US imports from China and a 38% fall in exports to China in 2025. This has forced global supply chains to adapt, with Southeast Asia gaining market share, and has increased costs and uncertainty for international businesses.
Infrastructure Expansion Faces Local Resistance
Major infrastructure and tech projects, such as Nvidia’s Kiryat Tivon campus, are transforming Israel’s economic landscape. However, local opposition, concerns over land use, and social tensions may delay projects, increase costs, and complicate stakeholder engagement for international investors and operators.
Industrial policy reshapes investment
Federal incentives and procurement preferences for semiconductors, EVs, batteries, and critical minerals are accelerating domestic buildouts while tightening local-content expectations. Multinationals may gain subsidies but must manage higher US operating costs, labor constraints, and complex reporting requirements tied to funding.
UK Government Pursues Diplomatic Resolution
Prime Minister Starmer has ruled out immediate tariff retaliation, emphasizing dialogue and alliance unity. The UK seeks to avoid escalation, but faces political pressure to defend national interests, balancing economic stability with transatlantic and European alliances.
Infrastructure Investment and Modernization
Private investment in infrastructure has surged, with R382.5 billion committed in 2025, but public sector investment lags. Major projects in digital networks, ports, and logistics are underway, yet persistent bottlenecks and underinvestment threaten supply chain efficiency and export competitiveness.