Lead Story
War and democracy: new global evidence of erosion with long tail
Analysts chart a persistent 3 per cent fall in the democracy index at war onset, lasting up to a decade, with the effect strongest in first-time and intrastate conflicts. The paper, drawing on 115 conflicts across 145 countries over seven decades, argues the damage to democratic institutions is political in nature rather than purely functional necessities of war. It finds winners are more prone to backsliding than losers, and autocratic shifts do not appear to drive victory. The implications tilt towards understanding resilience as a function of political constraints rather than the mere absence of conflict.
The study links war onset to substantial weakening of constraints on executive power, broadened coercive capacity, and increased media censorship and purges, all without clear evidence that autocracy is a prerequisite for victory. It points to a durable pattern: democratic backsliding is concentrated in first-time and intrastate conflicts, particularly in highly fractionalised societies. The long tail suggests that once institutional checks are weakened, the drift toward illiberal governance can persist for years or even decades.
Policy implications are substantial. If democratic resilience hinges on political constraints, then preventing the abuse of emergency powers and maintaining independent media and judiciary become vital for preventing lasting damage. The authors caution that the finding does not imply war inevitably destroys democracy; rather, it shows how incentives during conflict can hollow out restraints and empower incumbents to reshape institutions in ways that are difficult to reverse in peacetime.
Observers should monitor updated cross-country estimates and evidence on institutional constraints and reform efforts as follow-ups to this global analysis. The focus for policymakers, lenders and investors will be on whether external constraints and domestic reform can arrest or reverse deepening democratic fragility in conflict-prone regions.
In This Edition
- War erodes democracy globally: new global evidence and implications for resilience
- AI infrastructure and investment cycles: what the 2025-2030 outlook means for semis and data centres
- Active credit funds and risk in a rising-rate regime: the case for small issuers
- Oil and gas dividend strategies in a volatile market: 2026 ahead
- Ukraine and the risk to energy security: a Volgograd refinery in the crosshairs
- Brent price outlook: EIA/STE0 framing 2026 and 2027
- Corporate capital allocation in energy: TotalEnergies’ buyback stance and capex
- Battery supply chains and geopolitics: China’s grip and diversification moves
- Shale 2.0: U S majors expanding globally and the supply dynamics ahead
Stories
War erodes democracy: a global assessment
Governing institutions under stress after conflict onset are the focus of a major new global study. The analysis combines a large conflict dataset with high-resolution measures of democracy to compare treated countries with suitable controls. The core finding is a 3 per cent drop in democracy indices at onset, with the decline persisting for a decade in many cases. The study highlights mechanisms such as media censorship, judicial purges, and the suppression of civil liberties, which collectively weaken checks on executive power.
The work emphasises that the erosion is not simply a military or functional feature of fighting a war but rather a political recalibration in which incumbents gain room to consolidate authority. Crucially, the authors find that the damage concentrates in first-time and intrastate conflicts and that those who win wars are more likely to experience backsliding than losers. The interpretation favours a political account over a purely military one: a war may reshape governance structures in ways that endure long after combat ends.
Implications for policy and markets are nuanced. Democratic resilience appears linked to the strength and design of political constraints, rather than to the mere absence of war. As armed conflict becomes more common, understanding how to prevent war from becoming a gateway to autocracy is essential for the long-run health of institutions and economies. Monitoring reform efforts and cross-country updates will be key in gauging whether political constraints can be reinforced effectively.
AI is here to stay: five charts show the trajectory
Charts and forecasts argue that AI-driven infrastructure buildout is a durable trend rather than a speculative bubble. Costs of AI capabilities have fallen sharply, aligning with a broader real-world deployment path. ARK Invest projects AI infrastructure expenditure exceeding $1.4 trillion by 2030, with 2025-26 data indicating a continued surge in data-centre investment and revenue growth for leading AI providers. The investment cycle is framed as a long-run driver for semiconductors, cloud capacity, and software.
The analysis stresses that the AI story is one of productivity and adoption rather than hype. Despite lofty valuations in some pockets of the tech sector, the underlying economics show a real expansion in infrastructure spend and persistent monetisation of AI capabilities. The combination of cost declines and revenue growth points to durable demand for computing and storage capacity.
Investors are urged to track indicators such as ARK and Gartner forecasts, OpenAI/Anthropic revenue trajectories, and capex in data-centre hardware. If the trajectory holds, AI could recalibrate productivity metrics and capital allocation across sectors, not just within technology. The story also notes that public market valuations remain below historic peaks relative to dot-com-era highs, even as AI profitability broadens.
The young strategic bond fund topping the sector
Active credit strategies focused on smaller issuers are in focus as a potential source of alpha in a higher-rate environment. Man Dynamic Income has posted 65.3 per cent over three years to end-2025, outperforming the IA Sterling Strategic Bond sector. The fund’s bottom-up approach to smaller issuers amplifies potential returns but carries higher default risk and occasional softness in share classes.
The performance signal underscores the appeal of selective credit strategies in an environment where traditional high-grade assets offer lower yield assurances. Yet the concentration in smaller credits exposes the portfolio to idiosyncratic risks that could trigger drawdowns if economic conditions deteriorate. Managers emphasise the importance of monitoring defaults and annualised returns to late-2026 for evidence of resilience or deterioration.
From an investor perspective, the story flags the need for careful risk budgeting and diversification, particularly in periods of volatility and rising uncertainty about defaults. The near-term focus should be on credit conditions and the potential for issuer defaults to alter the portfolio’s risk/return profile. The fund’s category positioning suggests attention to drawdown patterns and liquidity constraints as market conditions evolve.
Five Oil & Gas Dividend Stocks for the Year Ahead
Income-focused oil and gas equities are highlighted as a counterpoint to broader market volatility. Exxon Mobil tops the list with a forward yield around 2.7 per cent and a 52-week return approaching 40 per cent, followed by Chevron at roughly 3.9 per cent yield. Enterprise Products Partners, Enbridge, and Peyto offer varying blends of yield, growth, and exposure across the energy value chain.
The list illustrates investor preference for high income within a volatile energy complex, balancing payout trajectories with growth prospects. Dividend sustainability is a key watchpoint; the sector’s response to oil price trajectories, capital discipline, and potential shifts in policy will shape 2026 performance. Analysts suggest tracking dividend changes and relative performance across the cohort as a proxy for broader market risk sentiment.
The strategy remains contingent on price and policy dynamics. Payouts can be sensitive to commodity cycles, capex plans, and debt levels, while diversification across midstream and downstream assets may provide a cushion against pure upstream volatility. Investors should watch for changes in cash flow supports and any alterations to guidance on dividends through 2026.
Ukraine hits Lukoil refinery
Ukrainian claims a drone strike targeted a major Russian refinery in the Volgograd region. Design capacity of the facility is around 300,000 barrels per day, and fires have been observed in the wake of the strike. The incident raises energy-security concerns for Russia and the potential for supply disruptions in regional markets.
Observers note the ongoing energy-security risk and consider Russian responses as a potential escalation. The story emphasises the risk to fuels supply if sanctions dynamics or countermeasures shift in the region. Markets will be watching refinery throughput, energy export flows, and any new sanctions developments that could alter the regional supply balance.
The incident sits within a broader pattern of elevated geopolitical risk around energy infrastructure. While the precise operational details remain a matter of ongoing verification, the implications for regional energy security and policy responses are clear: any disruption here could ripple through European and Eurasian energy markets.
EIA Sees Brent price dropping in 2026 and 2027
The U S Energy Information Administration projects a lower Brent price trajectory for 2026 and 2027. The February STEO sets Brent at about $57.69 per barrel in 2026 and $53.00 in 2027, down from $69.04 in 2025. The report points to inventory builds and a flat OPEC+ response amid continuing Middle East uncertainty.
This backdrop suggests a more cautious capex environment for producers and potential policy responses to keep energy investment aligned with demand. Market observers should track actual Brent prices, OPEC+ decisions, and inventory changes to evaluate whether the forecast holds and how the price path affects project economics and capital plans.
Analysts caution that geopolitical ambiguity in the Middle East could alter the path, creating potential upside risks to prices if supply disruptions recur. However, the base case presents a benign balance for producers and consumers in the near term, subject to shifts in demand and policy.
TotalEnergies cuts buyback to the lower end of range
Capital allocation discipline is highlighted as oil prices soften. TotalEnergies has reduced its quarterly buyback to $750 million while maintaining a yearly range of $3-6 billion, keeping the dividend unchanged and earmarking around $15 billion for 2026 net investment. The company emphasises production growth and a diversified asset base including renewables and gas.
The signal reflects a strategic emphasis on balance-sheet strength and longer-term growth over immediate shareholder-return expansion. Investors will be watching whether 2026 production and capex plans translate into the promised growth trajectory and whether the company maintains discipline across markets with volatile price signals.
The move aligns with broader industry caution about capital allocation in a price environment that remains uncertain. Market participants will look for 2026 guidance on output, potential M&A activity, and any shifts in the share count that could affect per-share metrics.
The global battery race heats up as China tightens its grip
China dominates energy storage with over 80 per cent of battery cells produced in 2024. Canada’s NEO Battery Materials reports a breakthrough in drone batteries that could raise capacity by 50 per cent and energy density by 40 per cent, signalling potential diversification of supply chains and new military and automotive applications.
Geopolitical and policy implications are front and centre as supply chains seek resilience beyond China. Observers will monitor partnerships, military contracts, and policy shifts that could redefine regional capability and reliability for critical battery supply chains. The evolution of downstream processing and the role of alternative hubs will be decisive in the coming years.
Industry watchers will also track the regulatory environment and the pace at which new regional initiatives move from pilots to scale, assessing whether a truly multi-regional battery ecosystem emerges alongside China’s dominant position.
The global shale 2 0: U S majors go global
U S shale players expand internationally to key basins outside the United States. Argentina’s Vaca Muerta, Turkey’s Diyarbakir and Thrace, Australia’s Beetaloo, and the UAE feature prominently as major operators diversify beyond their home markets. Market dynamics include geopolitics, capital markets, and reserve life, with estimates suggesting roughly seven to seven and a half years of high-quality shale reserves for major players.
The shifts could alter global oil supply dynamics, project economics, and the strategic posture of large energy companies. Observers should monitor international drilling activity, capex allocations, and reserve updates as these cross-border moves unfold. The speed of deployment and the political environment in each region will shape the pace and viability of these expansions.
This broad trend also raises questions about how foreign markets will respond to Western shale technology and whether new partnerships will emerge to support cross-border development and financing. The near-term signal is a continued push for geographic diversification despite the complexity of operating under varying regulatory regimes.
Albemarle to idle Kemerton lithium hydroxide processing plant
Western Australia’s Kemerton plant enters care and maintenance as price volatility persists. Albemarle will idle the remaining operating train, while maintaining core mining interests and supply through other channels. The move is forecast to be EBITDA-accretive in the second quarter of 2026, with no anticipated 2026 volume impact.
The decision underscores the pressures facing Western hard rock lithium processing and the importance of financial flexibility to weather price swings. Observers will watch for updated guidance on 2026 volumes and the potential use of alternative supply channels to meet customer demand. The broader implication may be a more selective approach to capex in Australian lithium value chains as part of a global realignment.
Industry participants will evaluate whether idling one processing line signals a broader retrenchment in the Western lithium conversion chain or a temporary optimisation of a diversified supply network to preserve long-term resilience.
Silver price volatile with surge above 86
Spot silver spiked as markets priced in renewed investment demand amid thin industrial uptake. Prices rose by as much as 6.6 per cent before retreating. The Silver Institute projects a sixth consecutive year of deficit, driven by investment demand that may outpace weaker industrial consumption.
The wide swings emphasise persistent volatility for precious metals, with potential implications for inflation hedging and the pricing of industrial inputs. Market watchers will monitor deficit revisions and industrial-demand indicators in 2026 data to gauge the risk of further price surges or declines. The delicate balance between safe-haven demand and practical industrial use remains a key barometer for the metal’s trajectory.
Indaba 2026: It’s Friedland’s future
Africa is framed as a central driver of mining evolution at Indaba 2026. Ivankhoe Mines founder Robert Friedland sketches a hub-and-spoke approach to unlock Africa’s mineral wealth, linking new visions for Red Mountain and Premier to a broader continental strategy.
The stance signals a shift in investor focus toward Africa’s resource potential and the policy environments that shape project pipelines. The narrative strands together permitting progress on Premier-Red Mountain with broader policy developments that could unlock regional investment. Observers will watch for tangible progress in permitting and policy reforms that could accelerate development across the continent.
The Indaba discourse may influence capital flows and partnership dynamics, inviting closer scrutiny of the regulatory and geopolitical context in which African mining projects operate.
PLS signs two-year spodumene supply deal with Canmax
Pilbara-based PLS Group inks a significant offtake for spodumene concentrate. The two-year deal with Canmax Technologies includes a 150,000 tonnes per annum supply from 2026, backed by a $100 million prepayment and a minimum price floor. The arrangement strengthens near-term lithium supply security and liquidity, with price certainty embedded in the deal.
Investors will watch for the option to extend the agreement and for utilisation of Pilbara’s Pilgan/Ngungaju facilities. The deal reflects a broader trend toward long-term offtake commitments to stabilise lithium markets amidst price volatility. The balance between price floors and market dynamics will be crucial as downstream processing and refining capacity expand regionally.
Elevra and Mangrove sign MoU for spodumene supply
Canada’s domestic battery supply chain gains a further anchor through a non-binding MoU. Elevra Lithium and Mangrove Lithium plan to supply up to 144,000 tonnes per annum of NAL spodumene concentrate from 2028, with potential downstream conversion to lithium hydroxide near Mangrove’s Delta plant. A binding agreement hinges on Mangrove proceeding with its conversion facility by mid-2027.
The arrangement reinforces Canada’s drive to bolster domestic battery materials and reduce exposure to foreign supply chains. Progress toward a binding agreement and downstream pilot outcomes in 2026 will be critical markers for the plan’s viability and for the broader strategy of near-shoring critical minerals.
Auriginal Mining secures permits to drill Roger Project
Canada’s Auriginal Mining gains permits to drill in Quebec. The plan covers 5,200 metres to probe potential volcanogenic massive sulphide mineralisation beneath the Rogers gold resource, with borehole EM surveys and a March starting programme.
A potential new discovery would broaden value at the Roger property and contribute to Canada’s mineral belt growth. Early drilling results and EM targets will determine whether the project becomes a meaningful addition to Auriginal’s portfolio and to regional exploration activity.
Azimut announces first drill results from Rosa Zone
Azimut Exploration reports early drill results from the Rosa Zone in the Wabamisk property. The programme included 3,633 metres across 26 holes, delineating a robust gold system over 1.4 kilometres with intercepts including notable intervals such as 1.29 g/t Au over 28.8 metres and 2.10 g/t Au over 10.5 metres, including higher-grade sub-intervals.
The discovery positions Rosa for resource growth and justifies further drilling to better define geometry. The planned additional 2,000 metres will be aimed at expanding the footprint and corroborating the system’s continuity.
Lundin Mining Caserones hybrid haul truck retrofit
Lundin Mining reports Caserones is operating a hybrid haul truck with a retrofit First Mode kit. The retrofit demonstrates immediate diesel savings and a substantial drop in fuel use, along with a major efficiency gain in haul cycles.
The development points to a scalable route for lower emissions in large copper mines and could accelerate the adoption of hybrid retrofits in the sector. Follow-on deployments at Caserones and broader fleet trials will illuminate the practicality and cost-benefit profile for other sites.
Hatch chosen to help Maaden develop Saudi mineral wealth
Hatch will act as strategic delivery partner across a portfolio of Saudi mining projects. The collaboration aims to advance Vision 2030 priorities through workforce development and data-driven project delivery.
This pick signals deeper international collaboration to industrialise Saudi mining and build national capability. Progress on the joint delivery framework and baseline studies across Maaden’s pipeline will indicate how quickly and effectively the plan can translate into tangible project execution.
G2 Sands discovery adds to Oko allure
G2 Goldfields reports a new discovery at the Oko project in Guyana. The development could strengthen the asset’s appeal ahead of a potential sale by expanding the resource base in a high-potential region.
Assays and ongoing drill campaigns will define scale and continuity, informing valuation and strategic interest from potential buyers. The result could shift investment dynamics in Guyana’s growing mining scene.
Equinor divests full onshore position in Vaca Muerta
Equinor agrees to divest its onshore Argentine operations in Vaca Muerta to Vista Energy. The deal includes major onshore stakes in Bandurria Sur and Bajo del Toro for about $1.1 billion, with upfront cash and equity components, while offshore acreage remains unaffected.
The move reshapes Equinor’s balance sheet and strengthens Vista’s onshore portfolio, with regulatory approvals and deal closing as key near-term triggers. The broader implication is a reconfiguration of Argentina exposure and regional investment strategy as operators recalibrate portfolios.
BP halts share buybacks
BP announces a pause on buybacks and trims guidance amid balance-sheet repair. The group ends a $750 million quarterly programme and defers guidance on returning 30 to 40 per cent of operating cash flow to shareholders, while keeping 2026 spend at the low end of prior guidance.
The decision reflects a shift in capital allocation as leadership transitions approach. Market observers will watch for a revised framework on capital returns and any strategic assays on growth investment and potential M&A that could accompany the transition.
Narratives and Fault Lines
- Democracy and conflict: The central tension is whether war triggers robust constraints on executive power or opens political space for repression. The emerging narrative suggests that the outcome depends on existing political checks and the strategic incentives of incumbents rather than on the battlefield itself.
- AI and infrastructure: A long-run buildout of AI capacity is reframing the demand environment for hardware, software, and data-centre infrastructure. The debate now concentrates on whether current capex trajectories are sustainable and how a potential productivity dividend translates into valuations and real-economy outcomes.
- Energy price cycles and funding: The energy complex remains highly sensitive to policy signals and geopolitical developments. The balance between capital discipline, dividend integrity, and growth investment will shape the sector’s resilience in 2026 and beyond.
- Global supply chains for minerals: The battery metals wave is pushing diversification beyond China, with Canada and other regions pursuing domesticising strategies. The pace and success of these efforts depend on permitting, policy support, and scale-up of downstream processing.
- Shale expansion and geopolitics: The global spread of shale activity raises questions about cross-border project economics and geopolitical risk management. Firms expanding into new basins must navigate regulatory regimes, local partnerships, and financing while maintaining a long-run view on reserves.
Hidden Risks and Early Warnings
- War-time governance fragility: Early indicators include rising media censorship, judicial purges, and executive centralisation that outlasts the conflict itself; watch for institutional purges and constitutional constraint changes in post-conflict periods.
- AI capex volatility: Watch for capex pullbacks if cost curves fail to translate into scalable revenue; indicators include data-centre capacity growth, supplier concentration, and enterprise AI spend as a share of IT budgets.
- Energy market resilience: Early signals include sustained pricing weakness or volatility in Brent, policy shifts, and refinery throughput data that could hint at structural bottlenecks or new capex cycles.
- Battery supply chain concentration: Indicators to watch include new regional processing facilities, policy incentives, and material price spreads that could either stabilise or destabilise domestic supply chains.
- Mineral exploration and project risk: Watch permitting timelines, equity funding availability, and cross-border regulatory changes that can alter project timelines and returns.
Possible Escalation Paths
- A shift in conflict dynamics raises democratic backsliding risks.
Trigger: intensification of intrastate conflict in key regions; observable indicators include faster constitutional relaxations and increased political instability.
- AI infrastructure accelerates productivity gains and capital expenditure.
Trigger: a surge in datacentre buildouts and AI software monetisation; observable signs include capex revisions and cloud-services growth.
- Energy price volatility reshapes investment and policy.
Trigger: a sustained Brent forecast gap versus current prices; observable signs include capex shifts and dividend policy recalibration.
- Battery supply chain diversification accelerates.
Trigger: new regional processing facilities starting up; observable signs include policy changes and procurement contracts in North America and Europe.
- Shale 2.0 cross-border activity expands.
Trigger: new international drilling programs; observable signs include cross-border permits, capex announcements, and reserve updates.
Unanswered Questions To Watch
- Will political constraints prove durable enough to curb democratic backsliding?
- How will AI capex and revenue trends interact with macro growth in 2026?
- Can smaller issuers sustain default risk amid a changing rate environment?
- Will dividend strategies hold up if oil price volatility persists?
- How will the Ukraine conflict evolve and affect regional energy security?
- Will Brent prices defy STEO forecasts if geopolitical risks flare?
- How will TotalEnergies adjust its capital allocation through 2026?
- Can Canada or other regions significantly diversify battery materials supply?
- Will U S shale majors sustain global expansions and financiers’ appetite?
- How will lithium processing capacity affect Western supply chains?
- What is the progress on Premier-Red Mountain permitting in Canada?
- Will Rosa Zone assays translate into resource growth?
- How quickly will hybrid retrofit pilots scale in copper mining?
- What are the regulatory implications of Equinor’s Vaca Muerta divestment?
- When will BP resume buybacks and what will the updated capital plan look like?
This briefing is published live on the Newsdesk hub at /newsdesk_commodities on the lab host.