Oil prices continue to be muted, mulling varied influences but way too frightened of falling foul of a geopolitical hand grenade that might be tossed from Washington. The leaders of Germany, the United Kingdom, Italy, Poland, Spain, the Netherlands, Denmark, NATO and the European Union gathered in Paris yesterday to find language in which they could demand a seat at the Ukraine war negotiating table. Alas, common ground could not be found which only serves an American point that a direct meeting between the US and Russia will not get bogged down with the niceties and vagaries of relationships within Europe. The UK is prepared to put boots on the ground if the US plays backstop while Poland refuses any sort of military imprint, for obvious reasons. The optics are of a high-level talking shop, summed up by the Dutch Prime Minister Dick Schoof that without a common agreement there can be little contribution even if admittance to the war table is allowed.

The firmer price set came from rumors that OPEC+ is considering a fourth postponement of the 120kbpd production increase due to be released in April. The notion was rebuffed by Russia’s Alexander Novak in TASS, but the residue of the idea remains. Adding to the slight forward progress was the drone attacks on Kazakhstan’s pipeline in Russia. There are reduced flows according to Caspian Pipeline Consortium (CPC), but the extent is unknown, although Reuters report a source indicating February’s loading plans are unchanged. The diplomatic and tariff wrangles along with the US holiday yesterday serve to frustrate forward thinking for global markets, let alone oil, and today is likely to serve up a dose of the same.

Flooding the diplomatic zone

As we approach a one-month measurement of a Donald Trump presidency, the frantic pace of action and news emanating from the White House has been a cascade, leaving the world’s peoples and markets in a state of breathlessness. Most had expected that President Trump would adopt a practice and linguistic import from American Football by ‘flooding the zone’, but even those of us betting on a fervent list of policy and intentions have been left behind in a hurricane of bluster. Edicts are cast down on the globe’s minions and one wonders if we once again get to experience a debate that Europe endured and fought over in the 16th, 17th and 18th centuries when faced with the ‘Divine Right of Kings’.

It is a hard stretch to compare the US leader with James I of England or Louis XIV of France, but Trump’s progress (he is hardly a pilgrim), does smack of monarchical absolutism. This may be over-egged, but at present there is no resistance to him, naysayers and opponents disappear from public opposition for fear of retribution. The Donald has raised the stakes to cancel culture, replacing it with outright revenge. Divine Right is substituted with Executive Authority, which ought to be used sparingly but is now the first thing Trump reaches for when he awakens each morning. He has revoked Joe Biden’s security clearance, dismissed the National Archivist who instigated the investigation around the handling of governmental papers in Mar-a-Lago, fired long-standing Department of Justice officials and pardoned over 1,000 convictions of those who stormed the Capitol on January 6, 2021. Confrontations in court no longer worry him, all cases against have disappeared and those that were part of the process in bringing them will feel his ire. Such domestic emboldenment has found its way into the delicate world of international diplomacy, smashing it to smithereens.

There is no time for the considerations of Europe’s history with Russia. A peace deal over the Ukraine war is just another transaction to be executed and feed his awareness of supporters who crow, ‘at least he gets things done’. European leaders are left in shock, none more than President Zelensky of Ukraine, after Presidents Trump and Putin conducted a 90-minute phone call over the war in Ukraine without any consultation with Europe, NATO and most importantly Ukraine itself. Donald Trump’s tolerance to Volodymyr Zelensky may just have been signalled during the US election campaign where he said of him, “Every time Zelensky comes to the United States he walks away with $100 billion, I think he’s the greatest salesman on Earth.” Subliminal or overt, retribution and policy imposition can easily be debated on varied fronts. It is unknown whether Trump still feels he had been undermined by Ukraine over the Hunter Biden fiasco, but he certainly holds a military spending grudge against Europe. Upping the ante, Donald Trump wants European governments to spend 5% of GDP on their militaries. This is much higher than the 2% guideline NATO countries ought to adhere to which itself is being sorely fallen short of.

The US Commander-in-Chief does a have point. Only Estonia at 4% of GDP and Poland at 3.25%, well above their NATO membership expectation, come anywhere near a 5% target. Even the UK, normally the number 2 spender of NATO has yet to reach its government target of 2.5%. The European union is at a financial juncture, it feels its spending, particularly from some parts Eastern Europe would be better deployed in defending economic growth. This is why European military spending remains on average at 1.7% of GDP, according to the FT, much to the advertised chagrin of a fed-up US leader. The FT points out that in absolute terms Europe’s aid to Ukraine is Eur125 billion, whereas the US’s is Eur88 billion, but again, this is not happening in Uncle Sam’s back yard.
The diplomacies of the past have just lost all the usual niceties of the craft. Statesmanship means little to the US President, he is interested in Americanship. Carrot and stick, or cattle prod in some instances, retribution and results maybe some of his drivers. His image and pace of ‘can-do’ is far more important and this process, at least from an American point of view will not be allowed to get bogged down. This message is delivered bluntly by the US envoy to Ukraine, Keith Kellog, has basically said that there is no room at the table for Europe, one wonders if there will even be one for Ukraine. The proof in the pudding, will be how the game is played by President Putin. Not for him a rushed decision, and not for him any concessions other than those given by Ukraine. President Trump might be able to bulldoze a US mall-style swathe through an already tariff-nervous Europe, but the wily operator pulling the strings from Moscow is a whole different style of reinforced architecture.

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