This week, Ukrainian forces initiated new offensive operations in Russia’s Kursk region, while NATO ships deployed to the Baltic Sea to protect critical infrastructure from suspected Russian sabotage attempts. In the Indo-Pacific, Taiwan is investigating a Chinese vessel’s suspected role in damage to undersea internet cables, while the U.S. Treasury announced further sanctions against Chinese tech companies. In the Middle East, Hamas listed hostages it would be willing to release, while the UAE proposed a framework for the governance in Gaza in a post-conflict scenario.
Weekly Forecast Monitor: Jan. 10, 2025
The Geopolitical Hotspots Monitor examines the outlook for key geopolitical hotspots around the world.
1 Russia/Ukraine Conflict
Summary
The Russia/Ukraine war trended toward military and hybrid escalation scenarios as Ukraine initiated a counteroffensive against Russian and North Korean forces in Kursk and Russia made significant tactical advances in Donetsk. The Biden administration announced a new $500 million military aid package for Ukraine and is expected to enact an extensive sanctions package targeting Russia’s oil sector. NATO deployed ships to protect maritime infrastructure in the Baltic Sea from potential Russian sabotage operations.
2 Middle East
Summary
Conflict in the Middle East trended toward diplomatic de-escalation and military escalation scenarios as Hamas named 34 hostages it is willing to release in exchange for a partial withdrawal of Israeli forces from Gaza, and the UAE proposed the framework of an international body to govern Gaza in a potential postwar scenario. Israeli bombardments killed dozens of Palestinians across Gaza, and Israel intensified security operations in the West Bank after three Israelis died in an attack praised by Hamas. U.S. and British forces conducted airstrikes against al-Houthi rebels in Yemen.
3 U.S./China/Indo-Pacific
Summary
Tensions in the Indo-Pacific trended toward hybrid escalation as Taiwanese authorities investigated a Chinese vessel suspected of damaging an undersea internet cable northeast of the island. The U.S. Treasury Department announced sanctions against a Chinese network company it accuses of collaborating with hacking group Flax Typhoon, and the Pentagon has added five Chinese companies to its list of designated military companies. U.S. National Security Advisor Jake Sullivan concluded a trip to India aimed at boosting bilateral tech cooperation, and North Korea conducted a new intermediate-range hypersonic ballistic missile test.
4 Other Hotspots
United States
U.S. President-elect Donald Trump refused to rule out using economic or military force in an attempt to acquire Greenland, prompting strong condemnation from European leaders. Forecast – Hybrid Escalation Scenario
South Korea
President Yoon Suk-yeol, facing additional pressure to be removed from office, said he would accept the decision of of the Constitutional Court on his impeachment. Protests called for Yoon’s arrest, and the country’s prosecutors vowed to do whatever it takes to break the standoff with presidential security forces resisting attempts to arrest him. Forecast – Political Destabilization Scenario
Canada
Prime Minister Justin Trudeau announced his resignation as leader of the Liberal Party and said he will leave office once a new party leader is chosen. Forecast – Political Destabilization Scenario
The Global Connectivity Tracker examines the impact of geopolitical dynamics on key themes like trade, technology, and energy/climate.
1
Mauritania/Senegal
Liquefied Natural Gas
What Happened
The first phase of the Greater Tortue Ahmeyim natural gas project, centered in the waters off the shores of Mauritania and Senegal and completed in late 2024, has begun producing its first gas and is expected to begin deliveries of liquefied natural gas over the next several months.
Significance/Outlook
The project, which was jointly developed by BP, Kosmos Energy, Senegalese state-owned Petrosen, and Mauritanian firm SMH, is expected to ramp up production to 2.3 million metric tons of LNG annually in its first phase. The gas, which is being recovered from wells at depths of about 1.75 miles beneath the ocean’s surface, is processed into LNG at a floating offshore facility. Revenue from the project, combined with proceeds from oil exports that began in 2024, has made Senegal’s economy one of the fastest growing in the world, with the International Monetary Fund forecasting a 9.3% growth rate in 2025.
2
United States/India
Nuclear
This development will significantly strengthen the U.S.-India strategic partnership in the Indo-Pacific region by deepening cooperation in such a critical industry like nuclear energy technology. Additionally, it will support India in advancing its clean energy ambitions while driving economic growth.
What Happened
The U.S. government will remove restrictions on Indian nuclear entities as part of a broader effort to enhance bilateral energy cooperation.
Significance/Outlook
The exact regulatory changes have not been clarified; however, National Security Advisor Jake Sullivan noted in a statement that the move is expected to create opportunities for the restricted entities. This development builds on the U.S.-India nuclear agreement signed in 2008, which laid the foundation for civil nuclear cooperation. Removing these restrictions reinforces India’s position as a key U.S. partner in the Indo-Pacific region and on addressing shared challenges like energy security, climate change, and regional stability.
3
Türkiye/EU
Natural Gas
What Happened
Turkish Energy and Natural Resources Minister Alparslan Bayraktar said Türkiye is prepared to play a larger role in ensuring Europe’s energy security by acting as a hub for natural gas supplies after the end of Ukraine’s agreement to transit Russian gas.
Significance/Outlook
Due to its gas pipelines that supply European markets, Türkiye is likely to play a significant role as a gas transit state to Europe moving forward. The TurkStream pipeline, which crosses the Black Sea, allows Russia to continue sending gas to Türkiye, Serbia, and Hungary. The Trans Anatolian Natural Gas Pipeline transports gas from Azerbaijan to Türkiye and Europe. The Tabriz–Ankara pipeline carries natural gas from northwestern Iran to Türkiye. Türkiye’s natural gas export agreements with Romania, Moldova, Hungary, and Bulgaria demonstrate its vital role in European energy resiliency. In addition, Türkiye is diversifying its energy mix and transit capabilities by investing in liquefied natural gas projects that will help to boost European energy security. Türkiye could leverage its geopolitical position to develop and commercialize natural gas routes from Turkmenistan, northern Iraq (Kurdish gas), and the eastern Mediterranean (Cyprus and Egypt) to boost regional energy security. This diversification would diminish Türkiye and Europe’s dependence on Russian gas and promote regional stability and economic cooperation.
4
EU/Ukraine/Russia
Natural Gas
What Happened
Natural gas prices in Europe rose after Ukraine on Dec. 31 ended the transit of Russian natural gas into central Europe through its territory.
Significance/Outlook
The price of EU natural gas jumped from around $40 per megawatt-hour (MWh) in October 2024 to $50.6/MWh in early January. Slovakia and Austria, which relied on Russian gas flows through Ukraine, have arranged alternative supply but at higher cost, while Hungary will continue receiving Russian gas via the TurkStream pipeline. The expiration of the transit deal also caused gas shortages in Moldova/Transnistria. Due to the limitations of transportation infrastructure and high cost, LNG can only partially replace natural gas. Russia is projected to lose $6.5 billion per year in gas sales, while Ukraine will forego $1 billion in transit fees.
5
China
Critical Minerals
If not managed diplomatically, this trade rivalry risks escalating further, particularly given the potential for a shift in U.S. policy under the new administration and its historically assertive stance toward China. This development poses significant risks to global supply chains, particularly in the semiconductor, renewable energy, and EV industries while intensifying U.S.-China geopolitical tensions.
What Happened
The Chinese Ministry of Commerce announced plans to further restrict the export of advanced technologies.
Significance/Outlook
The new measures target technologies and critical minerals essential for manufacturing electric vehicle batteries, including lithium, gallium, and lithium iron phosphate (LFP). LFP is a critical component in the global semiconductor and renewable energy supply chains given its ability to produce efficient, cost-effective energy storage solutions and electric vehicles, both of which are pivotal to advancing sustainable technologies worldwide. This move is widely viewed as a response to the ongoing U.S. restrictions on Chinese technology in recent years, further intensifying strategic competition.
