Russia and Israel are still at odds. Last week, a Russian reconnaissance plane was shot down over Syria by Syrian air defenses. The Russians still blamed Israel for the attack, but they quickly put the incident behind them. Russian President Vladimir Putin described the event as an accident, and Israel dispatched the head of its air force to brief Russia. But on Sunday, Russia went back on the offensive, claiming that Israel’s version of events represented deliberate lies. According to the Russian Defense Ministry, Israel did not give an adequate warning of the presence of its planes over Syria, and Israeli planes were not in Israeli airspace at the time Russia’s plane was shot down. Russian media described Israel’s alleged actions as “treacherous,” “deliberate” and “hostile.” Israel’s defense minister attempted to defuse the situation, insisting that Israel-Russia relations were “under control” and rejecting the Russian Defense Ministry’s account of the incident – which is where things really escalated. Russia’s defense minister has since said the country would deliver S-300 air defense systems to the Syrian army within the next couple of weeks. Russia had agreed to provide them to Syria in 2010 but reneged because of Israeli opposition. For Syria to acquire such weapons would be a red line for Israel that, if crossed, could provoke a military response. If Russia moves forward, an already bad situation could worsen quickly.

The Bank for International Settlements is worried about the global economy. In its most recent quarterly report published Sunday, the bank highlighted the disparity between U.S. market performance and global market performance, pressure on emerging market economies and high debt throughout the world. The head of the bank’s monetary and economic department was more direct than a 153-page report can be. “With interest rates still unusually low and central banks’ balance sheets still bloated as never before, there is little left in the medicine chest to nurse the patient back to health or care for him in case of a relapse,” the official said. This is a marked change in tone from one of the most reliable institutions covering global finance. In June, its annual report began: “Coming off a vintage year for global growth, prospects look favourable.” A few months later, it is warning that the Indian summer of global growth may be closer to an end than it previously thought, and when the Bank of International Settlements talks, we tend to listen.

Relations between China and the U.S. continue to sour. On Sept. 22, China’s Defense Ministry said the Chinese military had halted all major military dialogue with the U.S. – a response to U.S. sanctions against China for procuring Russian military hardware. This was one of the few constructive channels for U.S.-China relations. Losing it amid the trade war bodes ill for bilateral ties. Meanwhile, Axios reported that the U.S. was planning an “administration-wide broadside” against China, to include the departments of treasury, commerce and defense. According to unnamed White House officials, the U.S. will produce evidence of Chinese election interference, property theft and cyberattacks. China may be trying to pre-empt the onslaught – the Information Office of the State Council published a white paper Monday that explained why Beijing thinks the U.S. is mischaracterizing a relationship that China sees as mutually beneficial. But that will fall on deaf ears in Washington. China is the weaker party here.

OPEC and Russia defy the United States. The U.S. wants the two oil producers to increase production to make up for Iranian crude, which the U.S. intends to take off the market through sanctions, and to keep energy prices low. OPEC initially agreed to increase production by about 1 million barrels per day in June. Even Saudi Arabia complied, at least at first. Saudi oil production has been essentially stagnant since then. Increases in production by countries like Libya and Iraq have offset the decline in Iranian oil exports somewhat, but the 150,000 barrels they produce every day pales in comparison to Iran’s 2.8 million barrels. Earlier this month, Russia said it would increase production by at least 300,000 bpd. Now, both OPEC and Moscow are singing a different tune. OPEC ministers agreed Sunday not to increase production. Saudi Arabia’s energy minister said that markets were adequately supplied and that Saudi Arabia would not go along with an additional increase in crude output at this time. Russia’s energy minister said no immediate output boost was necessary. (The country is, notably, already producing at record-high levels.) Brent crude prices were above $80 per barrel – good news for Saudi Arabia and Russia, not to mention U.S. oil producers, but bad news for the Trump administration, which was openly pushing for an increase in OPEC and Russian production and finds itself at least temporarily rebuffed.

Honorable Mentions

  • In response to reports from The Australian that Canberra is considering a joint naval base in Papua New Guinea, a former Papua New Guinean military commander said the issue should be debated in parliament.
  • The European Commission referred Poland to the European Court of Justice over its controversial judicial reforms.
  • China’s foreign minister said China wants to enhance cooperation with Caribbean nations. The statement comes after a meeting with the secretary-general of the Caribbean Community in Guyana.
  • A Chinese Naval Military Research Institute paper republished in a Chinese army magazine says the risk of “military crisis” with Japan has drastically increased and could undermine the Belt and Road Initiative.
  • Talks are underway to transfer air space control over northwestern Syria from Moscow to Ankara.
  • Turkey says joint patrols with the U.S. in Manbij will finally begin Friday.
  • The Uzbek Central Bank raised interest rates by 2 percent in response to inflation fears and pressure on its currency.
  • Japanese Prime Minister Shinzo Abe met with U.S. President Donald Trump on Sunday and will meet again on Wednesday. Top-level U.S. and Japanese trade officials meet on Monday.

Editor’s note: An earlier version of today’s memo misstated the capital of Australia.