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Currently in the South of France working on some of the material I developed in Lebanon. Every week will be a new dispatch from the ground. Check out this unlocked post for a look at the subscriber content.

This week seemed quiet but there's a clear pattern emerging. Dependencies are turning into weapons. The more you rely on a single point of failure, the more that will be exploited for gain. True in Beijing. True in Washington.

Let's get into it,

Eric

P.S. Check out the latest Under Report Podcast for the wrap up of our series on building peace.

Ukraine just became an arms exporter while it's still being invaded. A July 1 export mechanism, funded by Gulf and European money, marks Kyiv's shift from aid recipient to supplier and its move out from under unilateral US support.

The fertilizer panic round-tripped. Urea is now cheaper than it was before the Iran war started (weird). Phosphate stayed stuck and the fall booking window is where the real risk still sits (not so weird).

China blocks the two companies America built to escape it. Beijing added MP Materials and USA Rare Earth to its export control list on June 22, four months before the truce that's holding the whole thing together expires.

North Korea is playing its two patrons against each other. A more assertive Pyongyang is hedging back toward Beijing as its wartime value to Moscow starts to fade, refusing to pick a side because refusing is the leverage.

Mali's capital is being strangled without a shot fired. JNIM's fuel blockade is a siege template that could be turned on any landlocked Sahel state, and the junta's Russian backers can't break it.

What Happened. On July 1, Kyiv approved its first formal mechanism to export domestically made weapons, letting partner nations buy Ukrainian drones, electronic warfare kit, and munitions directly from manufacturers. The stated reason is blunt: Ukrainian firms now build more than the state can afford to buy. Kyiv's National Security Council projects $55 billion in production capacity this year against roughly $15 billion in funding to actually purchase it. This gives Ukraine a solid funding mechanism but also makes it's capacity a target.

Why It Matters. We're seeing a more aggressive Ukraine emerge both economically and militaristically. Ukrainian deep strikes have been choking Russian fuel supply, and on July 2 Moscow authorized refineries to produce lower-grade gasoline, an observable admission of strain. Meanwhile Russia's summer offensive is advancing at a fraction of last year's rate. So the same drone and long-range strike capability degrading Russia is now the product everyone wants to buy. The battlefield is the showroom. The US-Israeli war on Iran is what turned Ukraine from client into vendor. Air power from missiles is outdated and expensive. Gulf states came looking for the cheap answer, and Ukraine had it. Washington, which last year brushed off Kyiv's drone expertise, spent the spring drafting a joint production deal. When one Ukrainian firm plans 3 million drones this year against America's 300,000 last year, you can see why the dependency flipped.

What We're Watching For.

What Happened. Remember the fertilizer warning from the spring? It broke. Urea in New Orleans sat at $350 a ton on June 22, below the $455 to $470 range it held the day before the Iran war began, after peaking near $782 during the fighting. Roughly 200,000 tonnes of urea have moved through the Strait of Hormuz since the 60-day ceasefire, and China reentering the export market did as much as the ceasefire to drag prices down.

Why It Matters. I need to correct my own earlier framing here rather than paper over it. A few weeks back the read was that the fertilizer damage was locked in for the fall. On nitrogen, that's now too pessimistic. Urea has fully round-tripped. But the relief is uneven in a way that still matters. Phosphate never fell with urea, because sulfur, its key input, is still constrained and a handful of countries control that market with China showing no urgency to export. Over 40 ships carrying about a million tons of fertilizer are still queued to exit the Gulf, sitting behind oil and gas cargoes in priority. And US farmers' real exposure was never spring, which was already contracted. It's the fall prepay and winter fill window, where scenario models keep nitrogen elevated if anything reignites. The honest version: the acute crisis passed if the strait stays open.

What We're Watching For.

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What Happened. On June 22, China's Ministry of Commerce added ten US firms to its export control list, including MP Materials and USA Rare Earth, the two companies Washington has bankrolled to build a domestic rare earth supply chain. The Pentagon holds an equity stake in MP Materials. Beijing framed it as retaliation for the June 9 US move blacklisting Chinese military-linked firms, and it landed days after G7 nations agreed to cap rare earth imports from any single non-bloc country.

Why It Matters. The immediate market reaction was muted, and that's the tell. Both firms had already cut their Chinese inputs, so the designation is a signal more than a shock. The real chokepoint was never mining, it's processing. China refines around 90% of the world's rare earths, capabilities the West let migrate over decades, and even with controls nominally suspended, US shipments of yttrium, dysprosium, and terbium have run around 40 to 50% of pre-restriction volumes. Now the clock. The strictest controls are paused only until November 10, and nobody has said whether that holds.

What We're Watching For.

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