5G, Blue Hydrogen, South African Unrest, Peru in Flux and the Week in Review

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5G, Blue Hydrogen, South African Unrest, Peru in Flux and the Week in Review

A 5G future for everyone except China. Open RAN pioneer Rakuten agreed to acquire U.S.-based Altiostar Networks for $1 billion.

What it means: For a high-level primer on what the heck Open RAN is and why it’s important, read this. What a difference a few decades makes. In the 1980s, the U.S. was worried that Japan was taking over the world, specifically that it was taking over U.S. companies and displacing U.S. economic hegemony. Fast forward to 2021 and a Japanese company buying one of the few potential (long-term) U.S. alternatives to the de facto 5G triumvirate of Huawei, Nokia, and Ericsson happens without much objection. Japan and the U.S. are, after all, in the same “sphere of influence.” Expect more integration between their economies, especially as both identify China as a pressing and increasing threat. 

Blue hydrogen. A top official at Gazprom said that Russia’s top gas producer wants to become a market leader in “blue hydrogen” delivery to the EU. According to the official, the EU’s ambitious target of reducing its carbon footprint to zero by 2050 means Gazprom must pivot or else its revenues will decline. Meanwhile, natural gas prices are spiking to the highest levels since summer 2014. The U.S. Energy Information Administration projects prices above $3.00/MMBtu through March 2022.

What it means: “Blue hydrogen” is created by using natural gas, while green hydrogen is produced entirely by renewables. Get used to hearing a lot more about hydrogen as an energy source and about Russia’s attempts to translate its position as Europe’s leading supplier of natural gas into an equally dominant position in “blue hydrogen.” We just recorded a podcast with an expert on this, so stay tuned for more. As for gas prices: Moscow couldn’t have asked for better timing, as the spike in natural gas prices will place pressure on Germany to fast-track approval and completion of the Nord Stream 2 pipeline to meet demand, especially going into winter.

Round 2 for South Africa unrest? ​​Former South African President Jacob Zuma will be released from prison so he can appear in front of a commission of inquiry into corruption during his time in office.

What it means: The hearing is set for Tuesday. Remember, Zuma’s refusal to appear before the commission lead to widespread rioting and violence throughout the country, leading to the deployment of South African soldiers to regain the rule of law and to disruptions at key South African ports.

Peru in flux. New Peruvian President Pedro Castillo has started naming members of his Cabinet. The choice of Guido Bellido as prime minister — currently under investigation for defending the Shining Path – and of octogenarian Héctor Béjar as foreign minister roiled markets. Castillo’s subsequent choice of Pedro Francke as finance minister, and Francke’s quick announcement that he aims to retain Peru’s current central bank chief, calmed the situation some.

What it means: Sign up for LatamPolitik for more. 

Honorable mention 

An oil tanker in the Gulf of Oman was struck by a kamikaze drone, killing two crew members. Six ships off the coast of the UAE said they lost control of their steering around the same time a UK trade agency accused Iranian forces of “hijacking” an oil tanker in the area.

Ennahda, Tunisia’s largest Islamist party, announced that it viewed President Kais Saied’s recent extraordinary measures to suspend parliament as an “opportunity for reform.”

Responding to rocket attacks from Lebanon, the Israel Defense Forces struck multiple military targets inside Lebanon.

EU trade chief Valdis Dombrovskis and U.S. Commerce Secretary Gina Raimondo met and made progress in talks over U.S. Section 232 steel and aluminum tariffs.

Japan’s Defense Ministry announced plans to deploy new missile units on Ishigakijma island, roughly 200 miles off the northeastern coast of Taiwan.

According to Reuters, the Chinese government issued new local content requirements for Chinese companies buying 315 goods, including everything from medical equipment to ground radar equipment.

Natural gas prices are spiking to the highest levels since summer 2014.