The Peter Zeihan Podcast Series - One Ship Inspection Could Unravel Global Maritime Shipping || Peter Zeihan

Episode Date: January 1, 2025

The Nordic nations are teasing a new initiative of inspecting ships leaving Russia's St. Petersburg port for insurance and environmental compliance. This may seem insignificant, but it could disrupt shipping on a global scale.Join the Patreon here: https://www.patreon.com/PeterZeihanFull Newsletter: https://mailchi.mp/zeihan/one-ship-inspection-could-unravel-global-maritime-shipping

Hey everybody, Peter Zion here coming to you from the Tongariro crossing in New Zealand. We finally got a break in the weather, just in time for the Emerald Pools, which are, you know, volcanic and super stinky. Anyway, on the 17th, 18th of December, representatives from all the Nordic nations plus Poland and Britain, so that's Norway, Sweden, Finland, Denmark, Estonia, Latvia, Lithuania, basically got together and said that they're going to start checking ships that are coming out of St. Petersburg port in. the Baltic Sea for things like insurance and compliance with environmental regulations in order to disrupt the shadow fleet. The shadow fleet is how the Russians are getting their crude to market, since they can't sell it by pipeline and they can't use Western maritime insurance or navigation aids. They basically have to get insurance from the Russian government, the Chinese government,

or the Indian government. And there's suspicion that no one is actually issuing policies that these things are just to say they make it out of port. regardless of whether or not they have a policy the Indians, the Chinese and the Russians have never actually paid out on one before so if there was an accident, the idea is that there would be no one there to help pay for the cleanup. But more to the point, the Shadow Fleet is how the Russians get their money. They basically have uninsured or underinsured old aging tankers

that evade everything that the Europeans are trying to do to shut Russian oil out of their systems and especially to deny income to the Russians as they're launching a war in Ukraine. Will it work? It all depends upon how the Nordics and the Poles and the Brits decide to handle enforcement. So if a ship doesn't have anything, what does that mean? You confiscate it, you take it into port. That would be getting into some very interesting territory that would be uncharted in the modern age. The whole idea of globalization as created by and then guaranteed by the United States since World War II, is that anyone can sail anywhere at any time.

necessarily have to have insurance, although that's a really good idea. And if the Russians don't have it, it's then up to the Nordics decide what to do. And if the ships are confiscated, because they don't have something that is not technically illegal, or they haven't complied with something that just someone said that they needed to do, we enter into a new phase of naval maritime transport. If, if, if, if we go down that road, then there's no reason for any country really in the world to not take a ship that they like the look of or don't like the look of unless they fear the consequences of whoever happens to own the ship or whoever happens to have the ship registry.

The registry is a joke. Those are countries like Guinea-Bissau and Panama, basically places where you can basically file a web address for free and officially register your ship. If you're going to replace the system with something that actually means something, then it has to be a country that has a Navy that can actually protect the shipping. And there are only a handful of countries in the world that can even pretend to do that in a regional basis, and only one, the U.S., that could do it on a global

basis. And since the United States does not depend on international transport for most of its economic strength, it's a stretch to think that the United States would do that unless it was paid a whole lot of money. And so if the Nordics do this, it is the end of the globalized system, as we know it now. Keep in mind that I think we're going here anyway. There is too much shipping. There are too many powers. There are too many people wanting revision. And the U.S. has lost too much interest and we're probably going to a naval free-for-fall in the not too distant future. I'm not saying that this is the trigger, but I think it's time to start talking about what the next system looks like and what the consequences are. For the United States, if it happened today, it would hurt. Most of

the naval shipments that come into the United States are large container ships carrying manufactured goods from Asia. So we'd have to get by without things like phones and computers and all that. The more valuable stuff eventually would be flown. But for all the bulk stuff, you know, your stereo, your cars, you're going to be having some problems until that manufacturing capacity is rebuilt in North America, something we're working on, something that is unlikely to be finished before the end of the decade. So, you know, timing matters here too. For other countries, this would be an absolute disaster. Most of the countries of the world, especially in East Asia, import the vast majority of their energy and material inputs. Some of them are even dependent upon significant food inputs, or at least

the inputs they need to grow their own food. So if this happened to China, for example, we would easily have a de-industrialization will collapse complete with famine in a very short period of time, measured in months, not even years. What takes its place is probably original groupings where either the seas are safe or everyone's on the same side and agrees what the rules of the games are. That looks really good for the Western Hemisphere. That looks pretty good for the Scandinavian bucket. And in the Mediterranean, it might get a little dicey based on how relations between or among the Italians, the French and the Turks go. If they agree that they can work together, the med looks great.

And if they can't, you get two different Mediterranean that's shooting one another, which if you know your history has happened many, many, many, many, oh, so many times. So I can't wait until the first time that Sweden or Finland or Poland decide that a ship that's sailing by their coasts isn't doing something right. I want to see what they do. This is one of those many things that could all fall apart in a day. if the stars are aligned. So stay tuned.

This is probably not something you're going to have to wait for me to comment on because if it does go down, a lot of things are going to break real soon.