Sanctions, anti-cartel operations and regional conflict risks

Off Leash update 23 Oct

RUSSIA •The U.S. imposed new sanctions on Russian oil majors Lukoil and Rosneft yesterday - one week after the UK sanctioned the same companies. •These were the first war-related sanctions the U.S. has imposed on Russia since Pres. Trump returned to office, and Trump's Treasury Secretary - Scott Bessent - directly linked them to Pres. Putin's stonewalling on peace talks: "Given President Putin’s refusal to end this senseless war, Treasury is sanctioning Russia’s two largest oil companies that fund the Kremlin’s war machine." •The new measures are a significant escalation - Pres. Trump called them "tremendous sanctions" - and they appear intended to push Putin to agree to talks. They'll also help nudge India to reduce its Russian oil imports, since Indian refiners buy much of their Russian oil from the newly-sanctioned companies. •The EU also slapped new sanctions on Russia yesterday. The EU's new sanctions package - its 19th over the Ukraine war - targeted Russian liquefied natural gas imports.

CARTELS •The U.S. military carried out its eighth and ninth known strikes on alleged drug trafficking vessels in Latin America, killing five people between the two boats. •Unlike the previous seven known strikes, which took place in the Caribbean, these two both targeted boats in the eastern Pacific Ocean. •Following the latest strikes, Pres. Trump warned that his administration is "totally prepared" to expand its anti-cartel operations to strike drug-linked targets on land, which would be a significant escalation. However, he noted that land strikes may require Congress's approval.

VENEZUELA •Venezuela's Nicolas Maduro - who, not unreasonably, perceives himself as the target of U.S. anti-cartel operations in Latin America - announced that he has deployed an arsenal of over 5,000 Russian-made Igla-S anti-aircraft missiles "to guarantee peace, stability, and tranquility" in the face of unspoken U.S. threats against him. •Despite his lip service toward peace, it's Maduro - not the U.S. - who is explicitly banging war drums. In addition to deploying anti-aircraft batteries, he has ramped up militia recruitment and launched large, televised military exercises that feed into his regime's warnings that Venezuelans should prepare "for the worst" and ready themselves for war. •Satellite imagery analysts have been unable to spot any of the 5,000+ Igla-S missiles Maduro claims to have deployed, and Maduro has a habit of grossly exaggerating numerical claims like this (to wit, he claimed to have mobilized more people willing to fight for him than voted for him). The true number of Igla-S missiles in Venezuela is far fewer than 5,000

GAZA •The Israeli Knesset passed the first of four votes required to approve a bill allowing Israel to annex the West Bank - despite clear international opprobrium. •Sec Rubio reiterated U.S. opposition to annexation and called the bill "counterproductive" and "threatening to the peace deal." Even Prime Minister Netanyahu's Likud party opposed it and accused its proponents of trying to "damage our relations with the United States." •The measure still faces three more votes before it can be fully approved, and Netanyahu will likely press the Likud members who abstained from the first vote to fall into line and vote against the next ones.

DRC •China's Twangiza Mining declared force majeure after a drone strike took out power at its South Kivu gold mine. •Twangiza has had a rough go of it lately: Rwanda-backed M23 rebels occupied its mine in May, and - with the help of Twangiza's own employees - have since looted around $70 million worth of gold and $5 million in equipment and materials from the site. Their loot was secreted over the border to Rwanda for export, with the proceeds used to fund the Rwandan/M23's war.

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