Opinion
The great reversal of U.S.-Russia relations and China’s diplomatic choice
Ma Xiaolin, Professor at Zhejiang International Studies University, Director of the Mediterranean Research Institute
Zhang Lupeng, Professor at Zhejiang International Studies University, Director of the Slavic Research Center at the Mediterranean Research Institute
On February 27, Russian President Vladimir Putin stated at the annual meeting of the Federal Security Service (FSB) that Russia and the United States are ready to re-establish cooperative relations. He noted that not everyone is pleased with the U.S.-Russia dialogue and that some are attempting to disrupt the process. On the same day, U.S. and Russian delegations held the first round of closed-door bilateral consultations in Istanbul, Turkey, lasting over six hours. The focus of the talks was the operation of embassies in each other’s countries and visa issues.
This meeting followed a series of significant events, including the phone call between the U.S. and Russian presidents on February 12 and a milestone diplomatic meeting between senior representatives of both countries in Riyadh, Saudi Arabia, on February 18. These developments indicate that with the advent of the Trump 2.0 era, the two major adversaries—Russia and the United States—are attempting to turn the page on the dark chapter of the Ukraine crisis and move rapidly toward the normalization of bilateral relations. Additionally, according to Bloomberg, the two countries are discussing the Arctic as a new area for economic cooperation, including joint resource extraction and the development of Arctic trade routes.
At this delicate moment of a sharp adjustment in U.S.-Russia relations, Chinese President Xi Jinping spoke with Putin on the phone on February 24—the third anniversary of the outbreak of the Russia-Ukraine war. Two days later, Xinhua News Agency published a commentary stating that the conversation between the Chinese and Russian leaders sent a “clear signal to the world” in three key aspects: “China-Russia relations are mature, stable, and resilient”; “steady advancement of cooperation in various fields”; and “timely communication on important issues.”
As U.S.-Russia relations quickly warm, U.S.-European relations become tense, and the Russia-Ukraine war potentially accelerates toward an end in 2025, several key questions arise: Will U.S.-Russia relations see substantial improvement? Will China-Russia relations be affected? How will China respond to U.S.-China and China-Europe relations? How will China maximize benefits while avoiding harm? These are new and critical choices China must confront.
The U-Turn in U.S. Diplomacy and Russia’s Strategic Relief
The Russia-Ukraine war has lasted for three years. While Russia has occupied parts of four eastern Ukrainian regions, strengthened Putin’s leadership position, improved the Russian military’s combat experience, and deepened strategic cooperation with North Korea, it has also paid a heavy price. This includes but is not limited to: damage to its international reputation, strained diplomatic relations, declining regional influence, a NATO expansion forming a C-shaped encirclement around Russia, threats to maritime security in the Black and Baltic Seas, risks to overseas military outposts, massive war expenditures, economic sanctions disrupting trade and energy exports, reduced foreign investment, significant casualties, domestic tensions, and population loss. These difficulties have created unprecedented challenges for Russia. However, Trump’s pro-Russia stance has presented Moscow with a strategic opportunity, significantly easing external—particularly U.S.—pressure.
First, Russia’s “special military operation” is expected to achieve its strategic goals. The Trump administration has essentially accepted Russia’s conditions, including Ukraine not joining NATO, halting NATO’s eastward expansion, the resignation of the Zelensky administration, suppression of Nazi influences in Ukraine, and Russia’s control over portions of the four eastern Ukrainian regions. This includes gaining substantial land, resources, and population in the Donbas region. Meanwhile, peace talks will prevent further escalation of the war, reduce external military threats to Russia, and ensure the country’s strategic security.
Through three years of military action, Russia has reinforced its influence in the post-Soviet space, blocked Ukraine’s westward integration, demonstrated its resolve and ability to defend national interests, strengthened its voice on the international stage, secured its position in the Black Sea, and maintained control over the crucial strategic stronghold of Crimea. Furthermore, the new Syrian government has shown friendliness toward Russia, agreeing to allow Russian military bases in Tartus and Hmeimim as strategic footholds in the eastern Mediterranean.
Based on current trends, future peace negotiations will likely ensure Russia’s geopolitical interests in Ukraine, particularly its control over eastern Ukraine. Consequently, Russia’s geopolitical influence in Europe will be enhanced, positively affecting its security environment and increasing its leverage in negotiations with Western countries.
Additionally, Russia’s previously difficult situation is expected to improve comprehensively. The restoration of U.S.-Russia relations and peace talks with Ukraine could allow Russia to rebuild ties with Western nations, reduce international isolation, ease sanctions and external pressures, improve its global image, and expand diplomatic space. This, in turn, would better protect Russia’s national interests and enhance its international influence.
The Long-Term War’s Severe Impact on the Russian Economy
If Russia can collaborate with the United States to reach a peace agreement on the Russia-Ukraine conflict, it may gradually lift or ease sanctions, restore normal economic and trade exchanges with other countries, and stabilize energy prices. This would alleviate economic pressure and create favorable conditions for domestic economic development.
The Trump administration has claimed that it will not only cooperate with Russia in the fields of economy, energy, and space but also support Russia’s re-entry into the G7. These policies would be beneficial for Russia’s economic recovery and growth. Recently, the continuous strengthening of the Russian ruble indicates that the market is generally confident in the Russian economy. Once the war ends, Russia will be able to redirect more energy and resources from the military sector to domestic economic development, social progress, and improving people’s livelihoods. This would promote the comprehensive development of the country and society, enhance living standards, strengthen domestic stability and cohesion, and restore the country’s overall strength.
China-Russia Relations May Be Affected, and China Needs to Adjust Timely and Prudently
The improvement of U.S.-Russia relations will profoundly impact the Russia-Ukraine situation and the global landscape. The Trump administration, by strengthening U.S.-Russia relations and promoting peace talks between Russia and Ukraine, may readjust the United States’ global strategic layout, focusing more resources and efforts on other key regions and areas. This could lead to increased pressure and containment efforts against China.
First, Russia’s strategic dependence on China may decrease, requiring China to adjust its expectations. The frequent high-level interactions between Russia and the U.S. suggest a trend toward normalization of bilateral relations. Russia is expected to resume cooperation with the U.S. in several areas of shared interest, including Ukraine’s future and Middle East governance, as well as in the fields of economy, energy, and space exploration. As the Trump administration relaxes restrictions on Russia, the overall Western sanctions pressure will gradually decrease, expanding Russia’s strategic space for survival on the international stage.
At the same time, this also means that Russia’s dependence on China will gradually diminish, and its strategic autonomy will increase. The previous trend of Russia’s “pivot to the East and South” may slow down. As a result, China’s initiative in cooperation with Russia may decrease, and it will have to adapt to a scenario where Russia regains greater strategic autonomy and bargaining power in bilateral exchanges.
Second, the improvement of U.S.-Russia relations will not be smooth, and China need not be overly anxious. The current interactions between U.S. and Russian leaders only indicate a trend toward easing tensions, but resuming contacts does not equate to genuine improvement in relations. U.S.-Russia relations are still in the early “ice-breaking” stage, and there is still a long way to go before full normalization. Similarly, reaching a Russia-Ukraine peace agreement will require extensive work. Therefore, it is premature to declare a U.S.-Russia “honeymoon period” or predict that the Russia-Ukraine war will soon end.
China should closely monitor U.S.-Russia interactions, maintain communication with Russia, Ukraine, the EU, and the U.S., and coordinate with key Global South countries through mechanisms such as BRICS. This would allow China to continue playing a constructive role in the Ukraine issue while safeguarding its own interests.
Third, Trump’s major policy shift toward Russia faces resistance.
- Domestic political opposition – Trump’s policy proposals are highly controversial in the U.S., as the Democratic Party broadly supports continued assistance to Ukraine. Trump’s push for a Russia-Ukraine peace agreement could exacerbate partisan divisions and internal political struggles in the U.S., affecting the government’s decision-making efficiency and execution.
- Impact on the U.S. military-industrial complex – A peace agreement would immediately reduce military-industrial demand, which could lead to open or covert opposition from defense contractors and military-industrial capital.
- European dissatisfaction – Trump’s push for a Russia-Ukraine peace deal has already sparked dissatisfaction among European allies, who fear that the U.S. move will weaken NATO’s cohesion and leave Europe more vulnerable when facing Russia alone. This could lead to fractures in U.S.-Europe relations and impact traditional transatlantic alliances.
As a result, the trajectory of the Russia-Ukraine conflict will also depend on the responses of the EU, Ukraine, and other involved parties—it is not solely dictated by the U.S. and Russia. The Trump administration faces constraints from the Democratic Party establishment and military-industrial interests at home, and given Trump’s unpredictable leadership style, the process of restoring U.S.-Russia relations will not be entirely smooth. Whether there will be obstacles, how significant these obstacles will be, and whether there will be setbacks remain areas worth continuous observation and attention.
Managing Complex Relations with Russia and the U.S.: China Holds the Initiative
- Putin is not Trump; Russia-China relations under Putin will not experience drastic swings.
In the next four years, China should focus on consolidating and strengthening the comprehensive strategic partnership with Russia in the new era and enhancing communication and coordination with Russia on the Ukraine issue. As U.S.-Russia relations ease significantly, Russia’s diplomatic situation will gradually improve. However, under Putin’s leadership, Russia is unlikely to place more trust in the U.S. within just four years of Trump’s presidency than in its long-term strategic partners such as China.
Unlike Trump, who comes from a business background, Putin is a more stable and far-sighted politician who will undoubtedly make long-term, stable plans for Russia’s strategic development and national interests.
The world is generally adopting a wait-and-see attitude toward Trump’s current administration, closely observing whether his team can effectively govern the United States, suppress the Democratic establishment, build his own loyal political base, and achieve his goal of “Making America Great Again” by suppressing all competitors and consolidating U.S. global hegemony. The ultimate objective is to ensure that, four years from now, the MAGA faction can continue executing Trump’s policies and securing the interests of the Trump family.
- China should remain strategically clear-headed and not allow the Trump administration to disrupt its pace.
China should maintain strategic clarity, stability, and direction to the greatest extent possible, avoiding falling into a strategy of attrition set by its competitors.
In recent years, a common view among China-U.S. strategic think tanks is that within the next ten years, the power balance between China and the U.S. may shift. If, by then, China’s national strength surpasses that of the U.S., Washington may adjust its stance toward China—potentially abandoning its suppression strategy and choosing to cooperate with China in governing the world.
This is, of course, the ideal scenario. However, under this logic, China would need to accelerate its development over the next decade and surpass the U.S. in various key indicators. The danger of this approach, however, is that it could lead to excessive consumption of China’s developmental potential and exhaust the nation.
During the Cold War, the U.S. used military competition to drain the Soviet Union, eventually leading to its collapse. The Reagan administration’s “Star Wars” program forced the Soviet Union into an unsustainable arms race, depleting its national strength. This was a carefully planned U.S. strategic trap.
The current China-U.S. competition is a long-term struggle involving both economic development (“charging energy”) and strategic military capabilities (“releasing energy”).
– China’s institutional advantages, economic and social potential, and cultural resilience allow it to engage in a long-term battle of endurance rather than rushing to surpass the U.S. in every aspect.
– China does not need to engage in a direct competition for dominance with the U.S., nor does it need to exhaust itself in the process.
– Instead, China should focus on preserving national potential, balancing its relationships with the U.S., Russia, and Europe, and maintaining strategic stability on the Taiwan issue.
– China should leverage soft and smart power strategies to outmaneuver its opponents while ensuring sustainable and long-term national development.
– The ultimate goal remains the great rejuvenation of the Chinese nation, achieved through a balanced and methodical approach to strengthening both hard and soft power.
- China should strengthen relations with Europe, especially restoring cooperation with Central and Eastern European countries.
Trump’s pro-Russia stance has alarmed and dissatisfied European nations. Many EU countries fear that after suffering major economic losses due to the Ukraine crisis, they will also face U.S. security blackmail.
China should take concrete measures to help the EU enhance its strategic autonomy by strengthening economic, technological, and trade cooperation and ensuring shared benefits.
– Central and Eastern European countries, in particular, are increasingly concerned about their security as Russia gains the upper hand amid U.S.-Russia reconciliation.
– This presents an opportunity for China to revive the “16+1” China-Central and Eastern Europe Cooperation Mechanism.
– China should closely monitor these developments and strategically plan the restoration of China-Central and Eastern European cooperation.
Over the next three to four years, China should, under the framework of international norms, enhance mutually beneficial relations with Europe, boost trade exchanges, reduce tariff barriers, expand cooperation in artificial intelligence and renewable energy and strengthen people-to-people exchanges to increase China’s strategic maneuverability in Europe.
- Strengthening and protecting China’s strategic deterrence, particularly its nuclear deterrence and national security capabilities.
China must continue developing its strategic deterrence, particularly its nuclear deterrent and overall national security infrastructure.
– Enhancing the technological advancement and ensuring the absolute security of China’s nuclear capabilities is a key pillar of national security and territorial integrity.
– Regardless of whether they belong to the Republican or Democratic Party, U.S. politicians fear Russia’s strong strategic nuclear forces. As a result, the U.S. has always been cautious when dealing with Russia.
– Ukraine, on the other hand, lost its strategic nuclear deterrence and suffered severe consequences—its national security and territorial integrity were brutally violated.
To ensure China’s long-term national security, it is imperative to maintain a robust strategic deterrence, including nuclear capabilities, and reinforce national defense to deter potential threats.
Conclusion
- Putin’s Russia will not abandon its long-term strategic partnership with China in favor of short-term gains from Trump’s U.S.
- China should remain strategically patient, avoiding unnecessary exhaustion in competition with the U.S.
- China must seize the opportunity to strengthen relations with Europe, particularly Central and Eastern European countries, amid U.S.-Russia reconciliation.
- Strengthening strategic deterrence, especially nuclear deterrence, remains a crucial safeguard for China’s national security.
By following these principles, China can effectively navigate the shifting geopolitical landscape while ensuring its long-term stability and prosperity.
Opinion
Macroeconomic consequences of asymmetric UAV attacks in Russia
Today, the nature of asymmetric threats is undergoing a profound transformation, with their focus shifting increasingly toward economic centers. By mid-2026, the nature of asymmetric warfare within the borders of the Russian Federation entered a qualitatively new and critical phase.
An analysis of the Ukrainian unmanned aerial vehicle (UAV) strikes carried out in July 2026 reveals a deliberate shift in targeting. Moving beyond military installations and fuel-energy infrastructure, these attacks directly targeted civilian logistics networks and critical nodes of the macroeconomic infrastructure.
The primary objective of this strategic shift is to deplete the country’s internal resources, induce insurmountable disruptions in supply chains, and exert intense psychological pressure on the civilian population.
Large-scale, coordinated strikes on the distribution centers of Wildberries—Russia’s largest e-commerce platform and part of the RVB joint venture (formed by the 2024 merger of Wildberries and Russ)—became the symbol of this new phase of home-front vulnerability. The geographic scope of these attacks, spanning an unprecedented area from the Northwestern Federal District to Southern Russia and Crimea, exposed critical gaps in national industrial risk insurance mechanisms. Furthermore, this situation sparked severe legal disputes between platform economy giants and small businesses, compelling immediate intervention from both corporate executives and senior state officials.
Tracing the multi-layered consequences of the kinetic impacts resulting from these July attacks on the state’s digital and physical economy will shape the new architecture of civilian sector security.
The zenith of the logistical terror waged by Ukraine was recorded on the night of July 24, 2026, marking the most technically complex UAV attack inflicted on Russian Federation territory since the beginning of the year. According to data from the Ministry of Defense of the Russian Federation, domestic air defense systems detected and destroyed 571 fixed-wing Ukrainian UAVs that night.
Two points have become exceptionally critical here: saturating radar fields and the military “swarm” effect. In short, this event is the clearest indication that the enemy has transitioned to a tactic of overwhelming radar systems. At the same time, the “swarm” effect generated across a vast geographic expanse aims to rapidly deplete the ammunition of anti-aircraft missile systems and expose air defense positions deep behind the front lines.
The breadth of the targeted geography attests to the unprecedented scale of the operation. UAVs were neutralized over the Belgorod, Bryansk, Kaluga, Kursk, Leningrad, Novgorod, Oryol, Pskov, Ryazan, Smolensk, Tver, Tula, and Vladimir regions, as well as over Moscow, Krasnodar, the Republic of Crimea, and the waters of the Azov and Black Seas.
Such a dense dispersion of targets across a vast territory points to an attempt to paralyze transportation and logistics arteries within Russia’s European landmass.
In parallel with the mass deployment of UAVs, missile strikes were also conducted against civilian industrial enterprises. During the same period, a missile attack on a local enterprise in the Fileyka district of Kirov resulted in outright catastrophe, leaving 6 people dead and 32 employees injured with varying degrees of severity.
Following the incident, Regional Governor Aleksandr Sokolov stated that the situation required not only the evacuation of the wounded, but also large-scale interventions such as restoring water and power supplies and auditing the security of neighboring settlements. This combined approach—employing inexpensive kamikaze drones to degrade air defenses followed immediately by missile strikes on unprotected industrial zones—presents an entirely new threat paradigm for the civilian economy.
Systematic and sequential attacks directed at the facilities of a single commercial entity completely eliminate the possibility of coincidence. The strategic, macroeconomic, and psychological factors turning civilian commercial warehouses into critical vulnerabilities for an entire state rest upon four pillars:
- Role as the central circulatory system of domestic trade: Wildberries plays a critical role in the architecture of the modern Russian economy, connecting millions of consumers with tens of thousands of SMEs. Damage to distribution centers severe supply chains, triggering localized shortages of essential consumer goods and regional inflationary spikes. The primary goal is to destabilize the domestic market and create an artificial supply vacuum.
- Immense facility footprints and defense complexity: Spanning hundreds of thousands of square meters across the nation, these hangars constitute massive targets with high radar contrast. Unlike military bases, these commercial warehouses cannot possess their own air defense systems; placing every such facility under an air defense umbrella is physically impossible without compromising frontline systems.
- Social and psychological impact: In the eyes of the public, logistics centers symbolize daily economic stability. Black plumes of smoke visible from miles away, massive fires, and civilian casualties represent a hybrid terror tactic designed to transport an atmosphere of fear deep into peaceful cities and shake the internal socio-political climate.
- Magnified radius of economic impact: Inventory consumed by flames in these warehouses generally consists of stock purchased by merchants on credit. The destruction of commodity inventories holds the potential to cause mass vendor bankruptcies, bank loan defaults, and cascading layoffs across small businesses.
The events of July 2026 mark an irreversible shift in the threat landscape facing Russian commerce and macroeconomics. Attacks directed at Wildberries hubs in regions such as St. Petersburg, Moscow, and Tambov exposed the utter vulnerability of civilian logistics infrastructure.
Deploying relatively inexpensive unmanned aerial vehicles, the enemy is capable of inflicting tens of billions of rubles in direct damage, paralyzing the supply of essential goods, and triggering an acute social crisis in which hundreds of thousands of entrepreneurs face the threat of bankruptcy. According to Russian experts, the total cost of a single fire—similar to the Kotovsk incident on July 18—can range between 50 and 100 billion Rubles ($630 million – $1.2 billion USD).
Despite its massive capital reserves, corporate business was caught unprepared for military threats. The medium-term survival of the e-commerce economy depends on the state and the private sector uniting to engineer unprecedented systemic solutions. Establishing compensation funds and introducing mandatory risk-distribution mechanisms are critical steps that must be taken.
Logistics hubs will remain open targets unless a “state program for subsidized reinsurance of military risks” is established for the critical nodes of the civilian economy. In the future, it will not suffice for large enterprises merely to pour capital into the physical protection of infrastructure; they must also deeply decentralize their logistics networks to prevent the concentration of goods and capital at single points of failure.
Opinion
Egypt Under Fire: What Does the Damietta Strike Mean for Global Energy Markets?
Dr. Ahmed Moustafa, Director & Founder, Asia Center for Studies & Translation, Egypt
For the first time since successive waves of escalation between Washington and Tehran began in recent months, an Egyptian liquefied natural gas (LNG) export facility has become a direct target.
In the early hours of Wednesday, 29 July 2026, at least one drone struck the floating storage unit Energos Winter, owned and operated by a U.S. company and sailing under the Marshall Islands flag, while it was moored at the Mediterranean port of Damietta. The impact ignited a fire that spread to a neighboring LNG carrier, GasLog Salem. Egyptian authorities confirmed that the blaze was brought under control without any reported casualties, while no group had claimed responsibility for the attack at the time of writing.

A Broader Context That Cannot Be Ignored
The incident did not occur in a vacuum. It came only hours after the United States Central Command (CENTCOM) announced that it had conducted joint strikes with Saudi forces targeting armed factions in Iraq accused of launching drone attacks against Saudi oil facilities. Tehran responded by warning against a “miscalculation,” at a time when the Middle East is still grappling with the repercussions of an earlier round of escalation that erupted on 8 July, when U.S. forces carried out strikes inside Iranian territory following an attack on a commercial vessel in the Strait of Hormuz. Iran retaliated with attacks targeting U.S. military bases in Bahrain, Jordan, Qatar, Kuwait, the United Arab Emirates, and the Sultanate of Oman.
Against this tense backdrop, Damietta appears to represent yet another link in the chain of regional escalation—but an exceptional one. For decades, Egypt has sought to keep itself removed from direct military polarization in the region, unlike several Gulf states that have increasingly become arenas of open confrontation.
At the same time, this interpretation does not entirely rule out the possibility of an indirect Israeli role, driven by hostility toward Egypt’s growing diplomatic influence in the Palestinian and Gaza files. Cairo has remained committed to advancing the two-state solution and to implementing the second and third phases of the peace roadmap agreed upon following the Sharm El-Sheikh Peace Summit last October. The Israeli government, led by Benjamin Netanyahu, has sought to obstruct these efforts. Netanyahu, who is the subject of arrest warrants issued by the International Criminal Court, is widely accused of bearing responsibility for committing genocide that, according to Palestinian authorities, have resulted in the deaths of approximately 73,000 Palestinian civilians since 7 October 2023.
Why Egypt?
Over the past two years, Egypt has steadily strengthened its position as a regional hub for liquefying and re-exporting natural gas. This growing role has been supported by its two LNG plants at Idku and Damietta, in addition to a network of pipelines linking the country with Israel and Cyprus.
This infrastructure—unmatched elsewhere in the Eastern Mediterranean in terms of combined liquefaction capacity and direct access to European and global markets—has transformed Damietta and Idku into critical gateways for Eastern Mediterranean gas, including increasing volumes of Israeli/Stolen Palestinian natural gas liquefied and re-exported through Egyptian facilities.
According to local reports, the Energos Winter alone was supplying approximately 450 million cubic feet of gas per day to Egypt’s national grid and was preparing to receive four additional cargoes during August.
This expanding role gives any attack on Egypt’s gas infrastructure significance far beyond the immediate incident itself. It threatens not only Egypt’s domestic energy supplies but also a supply chain upon which Europe has increasingly relied as part of its strategy to diversify away from Russian natural gas.
Who Was Behind the Attack? Open Scenarios
At the time of writing, no organization had officially claimed responsibility, leaving several possible interpretations.
The first scenario cautions against prematurely attributing responsibility to Iran or its regional allies. It argues that the ambiguity surrounding the incident—and the absence of any claim of responsibility—may itself be deliberate, allowing whichever actor carried out the attack to undermine Egyptian stability without incurring immediate political costs.
This possibility includes actors competing over Eastern Mediterranean energy routes, as well as local or transnational groups pursuing agendas unrelated to the U.S.-Iran confrontation. Egyptian officials themselves have adopted a notably cautious approach. Egypt’s Minister of Information warned against “rushing to accuse any party,” while a former official suggested that “certain actors are seeking to drag Egypt into the conflict,” implying that the attack may have been designed precisely to draw Cairo into a confrontation it has consistently sought to avoid.
A second scenario, Israeli Involvement or the Involvement of Israel’s Allies
This, in itself, remains a serious hypothesis that is reportedly being discussed in undisclosed investigative circles. The prevailing analyses, supported by pro-Israeli and pro-American narratives, have largely centered on suspicions directed at Iran or Iran-aligned actors within the context of the ongoing conflict, rather than at Tel Aviv. This is partly because Israel maintains an energy partnership with Egypt, making any attack on an Egyptian export terminal potentially detrimental to its own natural gas interests.
Nevertheless, this hypothesis—like all others—must ultimately be assessed in light of the findings of the official investigations, which are still underway. It is worth recalling, however, that repeated warnings have been voiced regarding the visits of Israeli Prime Minister Benjamin Netanyahu to Washington, as such visits have often been followed by heightened regional instability, as was argued after developments last December. According to this line of analysis, Netanyahu seeks to prolong the conflict with Iran in order to strengthen his domestic political position, secure his continuation in office, and advance Israel’s long-term strategic objective of neutralizing Iran and carrying out “Greater Israel.”
Within this framework, some analysts argue that there are broader efforts to weaken both Egypt and Türkey. They cite remarks attributed to a former Mossad operative during appearances on Israeli television, alleging that such a strategy would also serve to divert international attention away from the Gaza file and the question of Palestinian statehood—an issue on which Egypt has intensified its diplomatic efforts in recent days. According to this interpretation, creating indirect pressure on Egypt—the region’s most stable and secure state—could be viewed as a means of drawing Cairo into a wider regional confrontation.
A third scenario links the incident directly to the broader U.S.-Iran escalation. According to the article, The New York Times, citing two Iranian sources, reported that the attack may have been intended as a signal that global shipping and energy supplies could face deeper disruptions should Tehran or its allies choose to escalate further. The sources, however, did not identify the perpetrators or specify the launch point of the drone.
The Messages Behind the Attack
Regardless of who carried out the operation, the choice of target sends several important signals. An attack on what the article describes as the first American-owned energy asset on Egyptian soil would convey a message to Washington that not only its military installations in the Gulf, but also its economic footprint across the region, has become increasingly vulnerable.
For Egypt, which has consistently pursued a policy of strategic restraint and regional neutrality, the incident serves as a reminder that its geographic position—adjacent to some of the world’s most important energy and maritime corridors—no longer guarantees insulation from the conflicts unfolding around it.
For global markets, the attack suggests that the geographic scope of potential disruption is expanding beyond the Strait of Hormuz and the Arabian Gulf into the Eastern Mediterranean, increasing insurance premiums for shipping and critical energy infrastructure in a region long regarded as comparatively secure.
Egypt’s Official Response
The Egyptian government handled the incident with considerable caution and procedural professionalism, treating it primarily as a crisis-management operation rather than a political event.
The Cabinet confirmed that the fire had been caused by a drone attack without attributing responsibility to any specific party, emphasizing that investigations were continuing “to take all necessary measures to safeguard Egypt’s interests and national security.”
Prime Minister Mostafa Madbouly described the response as a test of the state’s crisis-management capabilities, praising emergency teams for successfully moving the burning vessels away from the port, thereby preventing what could have become a far larger disaster.
President Abdel Fattah El-Sisi addressed the incident publicly for the first time during a telephone conversation with Spanish Prime Minister Pedro Sánchez. During the call, he confirmed that the competent authorities were conducting a comprehensive investigation, warned of the dangers posed by the escalating regional situation, and stressed the importance of cooperation between Egypt and the international community to contain the crisis while adhering to peaceful solutions.
This measured diplomatic approach—avoiding direct accusations while emphasizing de-escalation—reflects Cairo’s determination not to be drawn into a broader regional confrontation despite having come under direct attack on its own territory.
Several Gulf states also expressed their full solidarity with Egypt and voiced support for its efforts to safeguard its national security and sovereignty.
The Impact on Global Energy Markets
The Damietta incident occurred at a time when global energy markets were already under considerable strain. Brent crude had been hovering around US$90 per barrel following the escalation of 8 July, while the European Title Transfer Facility (TTF) benchmark for natural gas had climbed above US$700 per 1,000 cubic meters for the first time since March.
Any additional disruption affecting an Egyptian LNG export terminal risks reinforcing this upward trend. Europe has increasingly relied on Egyptian liquefied natural gas as part of its broader strategy to diversify supplies away from Russian pipeline gas. Consequently, even a temporary interruption to Egypt’s export infrastructure could heighten market concerns over supply security.
The incident also adds to the geopolitical risk premium already factored into insurance costs for vessels operating in the Eastern Mediterranean. Higher perceived risks could translate into increased shipping and insurance costs for LNG carriers throughout the region, even if subsequent investigations conclude that the attack was an isolated event unlikely to be repeated.
What Should Be Done to Prevent Similar Incidents?
First, Egypt should further strengthen its short-range air defense capabilities and counter-drone systems around strategic energy installations along its Mediterranean coastline. This includes deploying advanced early-warning radar networks and cost-effective interception systems capable of neutralizing small unmanned aerial vehicles before they reach critical infrastructure.
Second, broader regional intelligence-sharing mechanisms should be expanded among Egypt and neighboring states—including Cyprus, Greece, and Türkiye—in recognition of the increasingly interconnected nature of Eastern Mediterranean gas infrastructure and the shared strategic importance of safeguarding regional energy corridors.
Third, given that the targeted floating storage unit is owned by a U.S. company, Washington should contribute to financing and modernizing the protection of such critical infrastructure rather than limiting its response to statements indicating that it is merely “monitoring the situation,” as the article characterizes the U.S. reaction.
Finally—and perhaps most importantly—reducing the broader cycle of regional escalation between Washington and Tehran remains the only sustainable guarantee against similar incidents in the future. Any purely technical or localized security measures can mitigate immediate risks but cannot eliminate them so long as the underlying geopolitical drivers of confrontation remain unresolved.
Conclusion
The Damietta incident serves as a stark reminder that geographic neutrality alone is no longer sufficient to shield a country that has become a pivotal node in the global energy network.
References:
1- https://www.bbc.com/news/articles/c39ez3klwmro
4- https://www.nytimes.com/2026/07/29/world/middleeast/ships-drone-strike-egypt.html
Opinion
Rising populist parties in Europe and liberalism
Leon Trotsky, one of the foremost leaders of the October Revolution, defined fascism as the totalitarian organization of society by monopoly capital. Magnates of large-scale monopoly capital are acutely aware that their profits cannot be safeguarded in the absence of authoritarian political power. Thus, fascism finds its bedrock of support among capitalist forces, the grand bourgeoisie, monopoly capital circles, and major landowners. We are all too familiar with the calamities fascism wrought upon the world in the era preceding the Second World War.
The post–World War II era is often commemorated as the golden age of capitalism—a period characterized by robust growth rates and low unemployment. Real wages climbed, social rights expanded, demands for a welfare state remained vibrant, and the pursuit of a social state yielded tangible results. This era ultimately met its demise in the 1970s, undone by shifts in the regime of accumulation and structural economic crises.
Today, across Europe, political parties that could virtually be characterized as the direct successors to pre-WWII fascist movements are consolidating their electoral gains. Germany, France, and Italy serve as quintessential examples. These parties weaponize poverty, unemployment, and anti-foreigner, anti-immigrant, anti-Muslim, and anti-Middle Eastern sentiments, while capitalizing on the incompetence of traditional center-right and center-left parties and taking a deeply Eurosceptic, critical stance toward the European Union. They employ caustic rhetoric against the political elites who have dominated governance for decades. Receiving endorsement from both US President Trump and Russian leader Putin, they draw substantial support simultaneously from working-class constituencies—traditionally the bedrock of the left—and from grand capital circles. While monopoly capital quietly pats these populist movements on the back, it simultaneously winks at liberal-democratic and increasingly indistinguishable social-democratic parties that champion unbridled capitalism and aggressive liberalism. Beyond France and Germany, examples abound from Italy to the United Kingdom…
The interests of grand capital, which back populist regimes and advocate authoritarian governance, also champion localization. For the erosion of the national, the public, and the collective—alongside the attenuation of the central state and the elevation of the local—works decisively to the advantage of big capital.
Why?
Because of this:
Under liberalism, the state does not regulate the market; rather, the market regulates, directs, and subdues both the state and society. In a liberal order, the state is expected to act on behalf of capital and in favor of the market—intervening in politics, society, and the law, and enacting statutory frameworks strictly to this end. The state is tasked with engineering legal and institutional arrangements for the market’s account and benefit. Society is reduced to a market-society, wherein the citizen is reimagined as a consumer, a client, and an entrepreneur. Since competition is elevated as the supreme imperative, citizens themselves must become entrepreneurial and competitive—a posture the state actively promotes and incentivizes.
According to liberals, the state bears no obligation to shield its citizens from the pitiless mechanics of the market or the ferocity of unchecked capitalism. On the contrary, the state demands and encourages that citizens establish themselves as entrepreneurial actors within the market arena. Consequently, the state aligns itself with capital, operating at its beck and call. Hence, liberalism harbors an innate preference for unorganized, non-unionized, cheap labor. Wages are suppressed; agricultural subsidies are gutted to a minimum; and strikes are banned on the flimsiest of pretexts.
Because liberalism insists that the state be sculpted, organized, and driven according to market demands—allowing the market to command and direct the state—the liberal vision of the nexus between politics and economics, as well as politics and law, is deeply fractured. In their worldview, law must operate exclusively to the advantage of capital, acting as the vigilant sentinel for the inviolability of property rights. It must dismantle every obstacle standing in the way of free trade, unbridled competition, and the free market, while swiftly and severely penalizing any force that dares to impede them. To conform to the expectations and demands of capital: this is the primary imperative required of the law.
In sum, through its championing of identity politics, its reduction of the citizen to a mere client, and its liquidation of the state’s social character in order to place public power at the disposal of capital, liberalism stands fundamentally opposed to the social, the public, and the national. This is a truth that must be firmly impressed upon left-liberals, nationalist-liberals, and conservative-liberals alike.
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