Conflict

• [New] Demand for U.S. barrels will depend on how well the global economy fares in the coming years after its deepest recession since World War II.
• [New] Despite the current pandemic situation affecting the globe, geopolitical tension has significantly increased in the Middle East and Turkey and will likely continued till the end of 2021.
• [New] Coronavirus-spurred growth in the technology sector will help drive merger and acquisition (M&A) activity in the Asia Pacific in 2021, bankers and lawyers predict, with the potential easing of Sino-United States tensions likely to revive outbound investment.
• [New] In the last five years, following the invasion from Russia and the annexation of Crimea, Sweden has regularly increased its military budget, with plans to spend just under 2% of its gross domestic product on national defense by 2025.
• Some specific areas to watch in 2021 include the unpredictable future of Canada's minority government, Europe's continuing political dysfunction and simmering U.S.-China trade tensions.
• The effort to vaccinate against COVID-19 in 2021 will be the largest mobilization of resources, people and planning since the Second World War.
• 2021 will be a decisive year for climate change, marking the start of the sustainability wars in which Europe, the US and China will fight for global leadership in green technology.
• The British government has approved the largest rise in its defense budget since the end of the Cold War, with £16.5 billion in additional funding made available for spending, with a significant proportion to be invested in the increasing global threat of cyber security.
• Only in Iran was some detente noticeable: following the large-scale protests in 2021, the return of the US to the Joint Comprehensive Plan of Action and a lifting of sanctions meant that Tehran managed to at least see some economic improvements, and public discontent abated.
• The new (super-chilled) cold war between the US and Russia LNG/gas in Europe: The delayed completion of the Nord Stream 2 pipeline in 2 Q 2021 will join the recently-completed Trans Adriatic Pipeline (TAP) and rebounding Algerian gas flows as incremental gas supply flowing into Europe.
• The combination of the stimulus spending and decline in tax revenues will push US federal debt held by the public above 100% of GDP by 2021, the highest indebtedness since the end of World War II.
• The Biden administration will inherit a complicated file on the Middle East, not least because of the tensions between Iran and Israel, including over Syria.
• South Korea will seek to balance its relationship between China and the US - although tensions between Seoul and Tokyo could complicate South Korea's foreign policy.
• In 2021 EC will initiate an EU police cooperation code, which will allow improve cooperation between law enforcement institutions, including against the fight against terrorism.
• The Commission will propose an EU police cooperation code in 2021 to enhance cooperation between law enforcement authorities, including in the fight against terrorism.
• The world is turning a blind eye to the really path-breaking domains that will change the face of warfare in the coming years, and the US needs to keep pace with both China and Russia if it wants to win future wars.
• China threatened to impose countermeasures after Washington decided to blacklist more than 60 Chinese companies, a sign that tensions between the world's two biggest economies may further escalate during the final days of Donald Trump's presidency.

Last updated: 12 January 2021