Below the waterline

Recently: Why is the temperature nearly tripling across a single strip of Africa this week?

Today: A record global oil release buys everyone about 26 days—while late on Thursday, the U.S. started buying Russian crude to make up the difference. … Chile just swore in a far-right president whose cabinet includes two lawyers who defended the country’s last dictator. … &c.

For members: How did a criminal industry worth tens of billions entrench itself in Cambodia? Jacob Sims on the nexus of organized crime and autocracy in Southeast Asia. ... & How did governments become the most powerful force in global markets? Ilias Alami’s and Adam Dixon’s new book, The Spectre of State Capitalism.

+ New music from Peter Gabriel ...

Mining the strait

On Thursday, Mojtaba Khamenei, Iran’s new supreme leader, issued his first statement since succeeding his recently deceased father—a message read by a state television anchor, vowing to keep the Strait of Hormuz closed and continue attacks on Gulf neighbors. U.S. officials have since confirmed that Iran had begun laying mines in the strait itself, using small boats after American forces destroyed its larger naval vessels. Oil prices settled above US$100 a barrel for the first time since 2022. Iranian forces struck three more commercial ships overnight. The International Energy Agency released a record 400 million barrels from emergency stockpiles—the largest coordinated draw in history.

The mines change the calculus in the war at sea. Firing at tankers is violent but selective; mines are indiscriminate, persistent, and extraordinarily difficult to clear. The IEA’s record oil-stockpile release buys about 26 days at current disruption rates. U.S. Energy Secretary Chris Wright has said to CNBC that the Navy could begin escorting ships by month’s end—but escorts don’t neutralize mines. Some analysts forecast $150 a barrel if the strait stays closed. A fifth of the world’s traded oil passes through it, and right now, all of that’s standing still. … Late on Thursday, the U.S. Treasury authorized American companies to buy Russian oil already at sea—which so far would seem the strangest interaction between the wars in Europe and the Persian Gulf.

Meanwhile

• Two attacks, one day. A convicted ISIS supporter entered a classroom at Old Dominion University in Norfolk, Virginia, on Thursday, asked if it was an ROTC class, and opened fire—killing the instructor, a retired Army officer. Students subdued and killed the gunman with a knife. The Federal Bureau of Investigation confirmed the attack as terrorism. Hours later in suburban Detroit, a man rammed an explosives-laden vehicle into Temple Israel, one of the country’s largest synagogues; security staff killed him. No children or congregants were hurt.
• Pinochet’s heir. José Antonio Kast took office on Wednesday as Chile’s first hard-right president since the return of democracy in 1990. Kast—whose father fought in the Wehrmacht as a member of the Nazi Party before emigrating—campaigned in 1988 to keep the dictator General Augusto Pinochet in power and has named two former Pinochet lawyers to his cabinet. Kast won December’s runoff with 58 percent of the vote, promising a crackdown on crime and immigration.
• The president’s shoes. Spain has withdrawn its ambassador to Israel, with no reason given. … Lebanon’s Prime Minister Nawaf Salam, speaking minutes after Israeli strikes hit central Beirut: “We cannot accept that Lebanon once again becomes an open arena for the wars of others.” … Russia has airlifted 13 tonnes of medicine to Iranian civilians—Moscow’s first announced aid shipment since the war began. … A drone strike by Sudan’s Rapid Support Forces—paramilitaries fighting the army in the country’s civil war—hit a school and medical center in White Nile province, killing 17, mostly schoolgirls. … & U.S. President Donald Trump has taken to giving cabinet members, visiting allies, and Fox News hosts Florsheim dress shoes—guessing their shoe sizes, apparently with varying accuracy.

Feature

Code black

How did a criminal industry worth tens of billions entrench itself in Cambodia? Jacob Sims on the nexus of organized crime and autocracy in Southeast Asia.

Last October, South Korea issued a “code black” travel ban on parts of Cambodia and sent a high-level team to extricate Korean nationals trapped in cybercrime compounds—forced to work against their will. South Korean National Security Adviser Wi Sung-lac said intelligence services believed more than 1,000 citizens might be held in such compounds. A case from last summer sharpened the urgency: Criminals allegedly lured a South Korean student to Cambodia with the promise of well-paid work, then kidnapped, extorted, tortured, and killed him.

In January, Cambodia arrested Chinese-born Chen Zhi, chair of the Prince Group and alleged leader of one of Asia’s largest cybercrime syndicates, and sent him to China for trial. That followed months of pressure—not just from South Korea but from the United States and the United Kingdom, which sanctioned the Prince Group last October.

Since July, Cambodian police have targeted 250 cybercrime centers, claiming to have shut down roughly 200 of them—about 80 percent—and arrested nearly 700 alleged ringleaders. Prime Minister Hun Manet has pledged to eliminate all remaining compounds by the end of April. But independent verification remains scarce, and hundreds of sites may still operate. It’s an enormous industry. The United Nations reported in 2023 that some 100,000 trafficked people labored involuntarily in Cambodia’s cybercrime industry; in Burma, the number likely exceeded 130,000. How could it get this big?

Jacob Sims is a journalist and visiting fellow at Harvard University’s Asia Center. Sims says the cybercrime industry has grown so dominant in the Mekong region mainly because criminal syndicates have forged close working relationships with ruling regimes. Cambodia is a stark example: A ruling elite that seized control of the country’s political and economic institutions maintains its hold on power by going into business with criminal networks. The partnership works, Sims says, because it fits neatly with the elite’s longstanding business model—extracting rents from illicit and predatory industries.

But now Cambodia’s elites have had to recalibrate. The Thai military inflicted severe blows on Cambodian forces in the recent war, partly because no one would help a mafia-style regime like Cambodia’s. And then came pressure from South Korea, China, Britain, America, and others, who threatened to impose sanctions on regime insiders. This is forcing Cambodia’s rulers to crack down on some cybercrime syndicates—and yet the crackdown itself might be an elaborate way of covering up the sheer extent of the regime’s own complicity …

Books

The economy’s silent partner

How did governments become the most powerful force in global markets? Ilias Alami’s and Adam Dixon’s The Spectre of State Capitalism.

Last month, U.S. Secretary of Defense Pete Hegseth threatened the AI company Anthropic with a wartime law that would have let the Pentagon seize control of its technology for military use. In the end, the government simply cut Anthropic out of federal contracts.

That’s not the only recent case of Washington inserting itself into the corporate world. Last year, the U.S. government took a 15 percent stake in the mining company MP Materials. Former U.S. President Joe Biden blocked Nippon Steel’s takeover of U.S. Steel, which current U.S. President Donald Trump then overrode—claiming a “golden share” for the government in the process. Biden’s Inflation Reduction Act committed US$400 billion in clean-energy loans; the Chips and Science Act allocated $39 billion in subsidies for American semiconductor manufacturing.

These moves prompted The Wall Street Journal to criticize America’s “sea change from the free market ethos the U.S. once embodied.” In Europe, a Deutsche Bank research paper lamented that the EU’s emergency response to Covid-19 had pushed Germany “on its way to state capitalism.” The suggestion, from both, is that the West has followed China into a new era of state intervention.

New music

‘What Lies Ahead (Bright-Side Mix)’

Peter Gabriel is recording a new album, titled o\i. (His previous was i/o.) When it will appear, no one entirely knows. But this orchestral track, dedicated to inventors and invention, suggests it’ll be worth whatever the wait ends up being.