Weekly Forecast Monitor: Sept. 13, 2024

Summary 

The  Russia/Ukraine conflict trended toward military and hybrid escalation scenarios as Iran transferred ballistic missiles to Russia, Ukraine conducted a large-scale drone attack in and around Moscow, and the U.S. signaled openness to authorizing Ukraine to use NATO-supplied weapons to strike deep inside Russia. Russia continued its advance in Donetsk oblast, conducted cyber attacks against Poland, and expelled British diplomats.

Forecast indicators 

Military escalation scenario 

• President Joe Biden said the U.S. was considering altering its policy prohibiting Ukraine from using NATO-supplied weapons against military targets deep inside Russia, prompting escalatory rhetoric from Moscow. This would be a significant reversal of a policy position the U.S. has held since 2022.
• Several media sources have reported the U.K.’s lifting of restrictions on Ukraine’s use of Storm Shadow missiles against targets inside Russia. The U.K. is not expected to make a public announcement of the policy change. Moscow responded by expelling six British diplomats.
• U.S. Secretary of State Antony Blinken and U.K. Foreign Secretary David Lammy announced a pledge of $1.5 billion in aid to Ukraine during a visit to Kyiv. U.S. and U.K. officials discussed expected policy changes on long-range strikes inside Russia with their Ukrainian counterparts.
• The Netherlands has approved the use of Dutch-supplied F-16s by Ukrainian forces to support long-range strikes inside Russian territory.
• Ukraine conducted a significant attack inside Russia involving nearly 150 uncrewed aerial vehicles (UAVs), 20 of which targeted Moscow, resulting in the death of one Russian woman. Russia continued large-scale UAV and missile strikes against Ukrainian cities.
• Iran bolstered Russia’s arsenal with a shipment of ballistic missiles, estimated to number in the hundreds, while Latvia announced new weapons transfers to Ukraine. An Iranian-supplied and Russian-piloted drone crashed in Latvian territory.
• Russia has begun a counteroffensive against Ukrainian forces in its Kursk region and has reportedly recaptured a string of villages.

Hybrid escalation scenario 

• Sabotage operations by Ukrainian special forces destroyed railroad infrastructure in Russia’s Belgorod region, leading to train derailments.
• Russia continued UAV attacks against Ukrainian energy infrastructure, causing major damage to a power plant in northern Ukraine.
• Russian President Vladimir Putin threatened to limit the export of key commodities such as uranium, titanium, and nickel in response to Western sanctions.
• The Polish government has attributed significant cyberattacks primarily targeting its government agencies to actors directed by Russia and Belarus.

Diplomatic de-escalation scenario 

• Ukraine secured the release of 49 prisoners of war held by Russia in negotiations mediated by the UAE.
• German Chancellor Olaf Scholz announced that he and Ukrainian President Volodymyr Zelenskyy agree Russia should participate in any future peace conference.
• Russian Foreign Minister Sergey Lavrov dismissed what he called the “Zelenskyy formula,” the Ukrainian president’s preconditions for peace talks. Lavrov also expressed exasperation at the perceived unwillingness of Western governments to deviate from Zelenskyy’s points.

Summary

Tensions in the Middle East trended toward a military escalation scenario as Israel resumed its security operations in the West Bank, conducted a raid in Syria, and exchanged cross-border fire with Hezbollah. Israeli and U.S. officials expressed strong doubt over the prospects of Israel and Hamas reaching a cease-fire/hostage release deal.

Forecast Indicators

Military escalation scenario

• At least 18 people reportedly were killed in an Israeli operation against a Hezbollah munitions production facility in Syria. Unconfirmed reports indicate that Israeli special forces may have captured four Islamic Revolutionary Guard Corps personnel during the operation.
• Israel resumed operations in the West Bank cities of Tulkarm and Tubas, where it conducted an airstrike that killed at least five Palestinians. A Palestinian gunman killed three Israelis at a border crossing between the West Bank and Jordan.
• Israel exchanged gunfire with Hezbollah forces across the Israeli-Lebanese border, leaving a Hezbollah commander dead.
• Israel has said its airstrikes that killed dozens of Palestinians in designated humanitarian safe zones were aimed at senior Hamas militants hiding among the civilian population. Israel ordered more Palestinian civilians to leave northern Gaza.
• Türkiye struck nearly two dozen Kurdish Workers’ Party positions in northern Iraq. A Turkish solider died while fighting the group.

Hybrid escalation scenario 

• The U.S., along with France, Germany, and the U.K., announced sanctions against Iran in response to its recent transfer of ballistic missiles to Russia. Iran, which denied that an arms shipment took place, has vowed a response.

 Diplomatic de-escalation scenario 

• Additional demands from Israeli Prime Minister Benjamin Netanyahu over a negotiated cease-fire/hostage release deal in Gaza led U.S. and Israeli negotiators to publicly express strong pessimism over the possibility of success in the near term.

Summary

Tensions in the Indo-Pacific trended toward a military escalation scenario as China and Russia held new joint military exercises. Trade tensions between China and Canada ramped up as both implemented new restrictions. The U.S. House of Representatives passed several bills aimed at curbing China’s influence both domestically and in the Indo-Pacific.

Forecast Indicators

Military escalation scenario

• China and Russia announced they had held a new round of joint naval and air exercises in the Pacific, including in the seas of Japan and Okhotsk.
• Germany announced it would send two of its warships through the Taiwan Strait in the upcoming week, prompting an angry response by Beijing.
• North Korean leader Kim Jong-Un said his country plans to add to its nuclear weapons arsenal. North Korea also conducted test launches of short-range ballistic missiles off its east coast.

Hybrid escalation scenario 

• China launched a one-year anti-dumping investigation into rapeseed exports from Canada following Ottawa’s imposition of tariffs on Chinese electric vehicles. Canadian Deputy Prime Minister Chrystia Freeland announced possible further tariffs on batteries and critical minerals imported from China in response.
• The U.S. House of Representatives passed the Taiwan Conflict Deterrence Act and the Pacific Partnership Act among other bills aimed at curbing China’s influence domestically and in the Indo-Pacific. The measures will next head to the Senate.
• A sanctioned Russian liquefied natural gas (LNG) export facility, Everest Energy, has sent an LNG shipment destined for Asia for the first time via the Arctic northern sea route.

Diplomatic de-escalation scenario 

• Chinese Vice Commerce Minister Li Fei offered to reopen talks with the European Commission to address recent trade frictions.
• The Philippine envoy to the United Nations plans to organize a summit on the sidelines of the upcoming General Assembly to address ongoing confrontations with China in the South China Sea.
• China and the U.S. have pledged to cooperate on coordinating on climate finance and efforts to reduce greenhouse gas emissions other than carbon dioxide following a meeting between U.S. climate envoy John Podesta and Chinese Foreign Minister Wang Yi.

United States

• Former President Donald Trump and Vice President Kamala Harris held a televised debate. The Department of Homeland Security announced security would be heightened for Congress’ certification of the 2024 election results.

Venezuela

• A Spanish air force plane flew Edmundo González, the opposition candidate in Venezuela’s disputed presidential election, to Spain, where he sought asylum. The Venezuelan government had issued a warrant for his arrest.
• The bolivar’s value fell in unofficial trade markets to levels as much as 20% lower than the official valuation, marking the biggest gap in the two rates since 2022. Its decline has been attributed to President Nicolás Maduro’s spending of a large portion of the country’s currency reserves to fund campaign activities.

South Africa

• The European Union’s energy commissioner announced the bloc will provide South Africa with $35 million in grants to jump-start the country’s green hydrogen industry.
• President Cyril Ramaphosa has signed the Basic Education Laws Amendment Bill into law. Democratic Alliance leader John Steenhuisen, who had publicly condemned the measure, has said his party will challenge the law in court.