Mission Grey Daily Brief - February 23, 2025

Summary of the Global Situation for Businesses and Investors

As the third anniversary of the Russia-Ukraine war approaches, the Ukrainian people are rallying around President Volodymyr Zelenskyy, who has been denigrated by US President Donald Trump and Russian President Vladimir Putin. Trump's false claims that Zelenskyy is a dictator and started the war have been criticised by Democrats and Republicans in the US Congress, and even some of Zelenskyy's harshest domestic critics have begun defending him. Meanwhile, Russia is preparing to declare victory in the war, and preparations are underway for a face-to-face meeting between Trump and Putin. In other news, Hamas has freed three more Israeli hostages as part of a fragile ceasefire deal, and Swedish authorities are investigating a damaged cable in the Baltic Sea, which has heightened fears of Russian sabotage and spying in the region.

Ukraine-Russia War

The Russia-Ukraine war is approaching its third anniversary, and the Ukrainian people are rallying around President Volodymyr Zelenskyy, who has been denigrated by US President Donald Trump and Russian President Vladimir Putin. Trump's false claims that Zelenskyy is a dictator and started the war have been criticised by Democrats and Republicans in the US Congress, and even some of Zelenskyy's harshest domestic critics have begun defending him. Trump's harsh words for Zelenskyy have drawn criticism from Democrats and even some Republicans in the US Congress, where defending Ukraine from Russia has had bipartisan support. However, Vice President JD Vance admonished Zelenskyy for publicly warning Trump about falling for Russian disinformation.

Trump's false claims have caused a political rift with the US, as Ukrainian forces, outnumbered and outgunned, increasingly struggle to hold back Russia's slow but steady advances. Trump has also signalled his desire to rapidly bring the fighting to a close on terms that Zelenskyy and many in the West say are too favourable to Russia. Reports have emerged of US and Russian officials meeting in Saudi Arabia to discuss a possible ceasefire without input from Ukraine.

Meanwhile, Russia is preparing to declare victory in the war, and preparations are underway for a face-to-face meeting between Trump and Putin. Senior US officials have suggested Ukraine will have to give up its goals of joining NATO and retaining the 20% of its territory seized by Russia. No Ukrainian officials were present at the Saudi meeting, and European allies have also expressed concerns that they are being sidelined.

Israel-Hamas Ceasefire Deal

Hamas has freed three more Israeli hostages as part of a fragile ceasefire deal, which has paused over 15 months of war but is nearing the end of its first phase. The latest hostage release, to be followed by the freeing of hundreds of Palestinians imprisoned by Israel, is going ahead after tensions mounted over a grisly and heart-wrenching dispute triggered this week when Hamas initially handed over the wrong body for Shiri Bibas, an Israeli mother of two young boys abducted by militants.

The dispute over the body's identity raised new doubt about the ceasefire deal, and negotiations over a second phase, in which Hamas would release dozens more hostages in exchange for a lasting ceasefire and an Israeli withdrawal, are likely to be even more difficult. The six hostages being freed are the last living ones to be released under the ceasefire's first phase. The new releases brought a moment of joy and relief for families, but with the ceasefire's future uncertain, fears remain over the fate of the remaining hostages seized during the Oct. 7, 2023, attack by Hamas that killed 1,200 in Israel and ignited the war.

Damaged Cable in the Baltic Sea

Swedish authorities are investigating a damaged cable that was discovered in the Baltic Sea, according to Swedish news agency TT. The breakage is the latest in a string of recent incidents of ruptured undersea cables that have heightened fears of Russian sabotage and spying in the region. Late last month, authorities discovered damage to the undersea fiber-optic cable running between the Latvian city of Ventspils and Sweden’s Gotland. A vessel belonging to a Bulgarian shipping company was seized but later released after Swedish prosecutors ruled out initial suspicions that sabotage caused the damage.

The most recent break was found off the island of Gotland, south of Stockholm, in the Swedish economic zone, TT reported Friday. The cable runs between Germany and Finland. Prime Minister Ulf Kristersson said on the social media platform X on Friday that the government takes all reports of damage to infrastructure in the Baltic Sea very seriously.

Russia-Ukraine War and Business

The Russia-Ukraine war has had a devastating impact on both countries, with hundreds of thousands killed or wounded, tens of thousands missing, and millions fleeing the country. The war has also had a significant impact on the global economy, with rising energy prices and supply chain disruptions.

For businesses, the war has created significant uncertainty and risk, particularly for those with operations in the region. The war has also disrupted global supply chains, particularly for energy and food, which has led to higher prices and reduced availability.

To mitigate these risks, businesses should diversify their supply chains and consider alternative sources of energy and food. They should also monitor the situation closely and be prepared to adapt their operations as needed.

Themes around the World:

Governance and anti-corruption scrutiny

High-profile investigations in strategic sectors (notably energy) and donor conditionality keep governance risk central. Political fallout from anti-corruption actions can affect state-owned enterprise contracts, permitting, and procurement timelines, increasing the value of robust compliance programs and transparent tender strategies.

Manufacturing slowdown and resilience

Subdued UK manufacturing conditions and soft demand, alongside higher financing costs, are pressuring output and supplier health. Companies should stress-test UK tier-2/3 suppliers, diversify sourcing, and anticipate longer payment cycles, while monitoring industrial strategy support for key sectors.

Tighter foreign investment screening

Approval of Mara Holdings’ acquisition of EDF’s Exaion came with sovereignty safeguards: limits on sensitive data hosting, governance controls, and ongoing ministry monitoring. This underscores heightened scrutiny of strategic tech and infrastructure deals, extending timelines and conditions for foreign acquirers.

Foreign-backed infrastructure dealmaking

Mota-Engil is in advanced talks to assume Bahia’s Fiol rail, Porto Sul port, and Caetité mine in a ~R$15bn package, reportedly financed via China-linked capital. This signals renewed concession momentum, but adds geopolitically sensitive financing, governance, and execution considerations.

Cross‑Strait Security Risk Premium

Persistent China–Taiwan tensions raise tail risks for shipping, aviation, and insurer pricing. Even without disruption, companies must plan for sudden sanctions, export controls, or logistics rerouting that could interrupt just‑in‑time electronics, machinery, and intermediate-goods flows.

Commodity export surge, value-add push

Merchandise exports reportedly rose ~55% to $13.43bn in 2025, driven by gold ($6.40bn) and coffee ($2.46bn). Opportunities grow in processing and logistics, but earnings concentration and provenance concerns heighten compliance, reputational, and FX volatility risks.

Trade-Finance And GST Formalisation

GST receipts rose to about ₹1.83 lakh crore in February, with import IGST up 17.2% versus 5.3% domestic growth, signalling import-led buoyancy and tighter compliance. Faster refunds and digital enforcement improve formalisation, but raise audit, documentation and cashflow discipline demands.

AUKUS industrial base build-out

AUKUS implementation is moving into maintenance and supply-chain integration in Western Australia ahead of SRF‑West (2027). Defence primes and suppliers face expanding local-content, security, and workforce requirements; dual-use manufacturing opportunities increase for qualified foreign partners.

Cybersecurity and digital resilience pressure

Taiwan faces persistent cyber threats targeting critical infrastructure and corporate networks, raising compliance and operational resilience requirements for multinationals. Expect tighter security expectations in procurement and incident reporting; firms should align SOC capabilities and third-party risk controls.

Black Sea export corridor risk

Russia’s intensified missile and drone strikes on ports keep the Odesa maritime corridor operational but fragile, raising insurance and freight costs and causing volatile volumes. Disruption would hit grain, metals and containerized trade, widening delivery lead times.

Shadow-fleet oil logistics disruption

Iran’s crude exports rely on aging “dark fleet” tactics—AIS gaps, reflagging, ship-to-ship transfers—often staged near Malaysia before reaching China. Recent interdictions, including India’s seizure of three Iran-linked tankers, signal higher detention, demurrage, and cargo contamination risks.

Energy import dependence and LNG surge

Taiwan’s trade deal embeds large 2025–2029 purchase commitments, including about US$44.4B in LNG/crude and US$25.2B in power-grid equipment. This signals accelerated energy-security investment but reinforces import exposure, affecting electricity costs, PPAs, and industrial siting decisions.

Pungutan ekspor CPO naik 12,5%

Mulai 1 Maret 2026, pungutan ekspor CPO dan beberapa turunan naik dari 10% menjadi 12,5% berdasarkan harga referensi. Industri memperkirakan tekanan harga CPO sekitar 3% dan TBS 7–8%. Kebijakan ini mengubah struktur biaya, strategi hedging, dan daya saing ekspor sawit.

Expanding sanctions and secondary exposure

U.S. “maximum pressure” is tightening on Iranian energy, shipping, and facilitators, raising secondary-sanctions risk for ports, traders, insurers, and banks. Compliance costs rise, counterparties de-risk, and contract enforceability weakens—especially where transactions touch USD clearing, Western logistics, or dual-use items.

SEZ rules tighten corporate compliance

Saudi special economic zones are moving toward a more detailed corporate rulebook, with draft regulations under public consultation. While SEZs can offer incentives and simplified setup, firms should expect clearer governance, reporting, and entity-structure requirements that affect tax planning, capital deployment and intercompany arrangements.

Labor constraints and immigration politics

Tight labor markets and politicized immigration enforcement debates amplify wage pressures and hiring uncertainty, particularly in manufacturing, logistics, and tech. Compliance and reputational risks rise for employers, while supply-chain throughput can be constrained by worker shortages and turnover.

Pembatasan pajak layanan digital

Klausul ART melarang pajak layanan digital yang diskriminatif terhadap perusahaan AS serta melarang bea atas transmisi elektronik, sambil membuka komitmen transfer data lintas batas. Ini menurunkan opsi kebijakan fiskal dan memengaruhi negosiasi dengan platform global, tetapi dapat mempercepat investasi cloud, pusat data, dan layanan digital.

Labour shortages and mobilisation pressure

Mobilisation and displacement continue to tighten labour markets, raising wage pressure and reducing skilled workforce availability in manufacturing, construction, and logistics. Companies face productivity constraints, higher training costs, and execution risk for reconstruction projects and long-duration contracts.

Middle East war disrupts shipping

Escalating conflict is driving carriers to suspend bookings and reroute Europe/UK cargo via the Cape of Good Hope, adding 15–20 days. War-risk surcharges and container shortages (especially reefers) pressure Vietnam exporters’ margins, inventory planning, and contract terms, notably in apparel and seafood cold chains.

Maximum-pressure sanctions escalation

The US is expanding sanctions on Iran’s “shadow fleet,” intermediaries in the UAE/Türkiye, and weapons-procurement networks, raising secondary-sanctions exposure. Compliance costs, de-risking by banks/shippers, and sudden designation risk complicate trade, contracting, and counterparty screening.

Central bank gold buying program

Bank of Uganda plans domestic gold purchases from March–June 2026, targeting at least 100kg, partnering with refineries for purity. This can bolster reserves and shilling stability, but increases AML/supply-chain due diligence expectations for bullion-linked traders and banks.

Energy policy and gas dependence

Mexico imports record U.S. natural gas (~6.638 Bcf/d in 2025) and uses gas for over 60% of power generation, while policy favors state firms. Exposure to U.S. supply/price shocks and regulatory uncertainty affects industrial power costs and project bankability.

Semiconductor concentration and geopolitics

Taiwan remains central to leading-edge chips (often cited around 90% of advanced nodes), making any disruption a systemic shock for electronics, autos, and AI infrastructure. Expect higher resilience costs, dual-sourcing, and strategic stockpiling across supply chains.

Supply-chain constraints from rail bottlenecks

With seaborne routes contested, western rail corridors are critical yet vulnerable to infrastructure outages, maintenance disruptions, and capacity constraints at border crossings. Businesses should plan for transshipment delays, higher trucking/rail costs, and inventory buffers for EU–Ukraine flows.

Power security and fast load

Electricity demand is targeted to grow 15%+ in 2026, forcing accelerated generation and transmission build-out. EVN plans hundreds of grid projects and pursues cross-border imports, targeting ~8,000 MW from Laos by 2030. Energy constraints can disrupt factories, data centers, and pricing.

Petróleo na Margem Equatorial

A fiscalização da ANP autuou a Petrobras por não conformidade crítica em sonda na Foz do Amazonas, com multa potencial até R$2 milhões e exigências de correção. Projetos na Margem Equatorial seguem com alto escrutínio regulatório, ESG e risco de interrupções, afetando cadeia de óleo e gás.

Risque budgétaire et fiscalité entreprises

La consolidation budgétaire reste contrainte par un Parlement fragmenté. Fitch maintient la note A+ mais pointe dette élevée; déficit attendu ~4,9% du PIB en 2026. Surtaxe exceptionnelle sur bénéfices prolongée, concentrée sur grands groupes, affectant plans d’investissement.

Asset seizure and expropriation risk

Russia’s state-driven confiscations are expanding, with reported criminal-case confiscation rulings rising from 11,000 (2023) to 31,000 (2025). Combined with forced “nationalization” precedents, this materially elevates political risk for any remaining or re-entering foreign investors and JV partners.

USMCA review and tariff uncertainty

The 2026 USMCA/CUSMA review, ongoing U.S. sectoral tariffs (steel, aluminum, autos, lumber) and threats of higher baseline duties are chilling investment and complicating rules-of-origin planning. Firms should stress-test pricing, sourcing, and cross-border compliance scenarios.

Regulação do mercado de carbono

O SBCE avança com regulamentação da Lei 15.042, normas infralegais previstas até dezembro de 2026 e etapas de MRV/registro até operação plena por volta de 2031. Impacta custos industriais, requisitos de reporte e competitividade em exportações expostas a políticas climáticas.

State-backed semiconductor industrial policy

Tokyo is deepening intervention to rebuild domestic chip capacity: government bought 40% of Rapidus for ¥100bn and holds a “golden share,” with plans to raise voting rights up to ~60%. Subsidies and guarantees reshape supplier location, IP partnerships, and geopolitical exposure.

Regime continuity and internal security

Leadership succession planning and expanded internal security readiness aim to keep decision-making functional under decapitation risk and suppress unrest. This supports a prolonged-war posture, reducing near-term deal prospects and elevating expropriation, payment, and contract-enforcement risks for firms with Iran links.

EU market integration and regulation

Ukraine is deepening alignment with EU rules and seeking accelerated accession, but EU capitals resist fast-track timelines. Progressive integration could expand single-market access (transport, digital, customs) while increasing compliance burdens, audit requirements, and regulatory change velocity.

Energy security and grid investment bottlenecks

Rapid build-out of renewables under Contracts for Difference, grid-connection reform and network constraints shape UK power prices and reliability. Energy-intensive industries face volatile costs and connection delays, while investors see opportunities in storage, flexibility services and transmission upgrades.

PIF strategy reset and prioritization

The $925bn PIF is reshaping its 2026–2030 strategy toward industry, mining, AI and tourism while re-scoping select giga-projects. For investors and suppliers, this shifts deal flow, timelines, and counterparty priorities, favoring bankable industrial and infrastructure packages.

Logistics and insurance cost surge

War-risk surcharges, marine insurance spikes (historically up to sevenfold), airspace closures, and Suez diversions increase end-to-end lead times and working capital needs. Korean exporters—especially SMEs—face higher contract-performance risk and should update Incoterms and buffer stocks.