This week, U.S. and Russian officials met in Riyadh without any Ukrainian representation to discuss first steps for a Ukraine cease-fire, while U.S. President Donald Trump caused a diplomatic stir by calling Ukrainian President Volodymyr Zelenskyy a “dictator.” In the Middle East, Israel and Hamas continued their prisoner exchanges and agreed to commence with the second phase of their cease-fire agreement by the end of the week, while regional states discussed alternative plans for the future of Gaza. In the Indo-Pacific, China filed official complaints with the World Trade Organization against U.S. tariffs, as Trump suggested he would expand tariffs to include 25% taxes on all imports of automobile, semiconductor, and pharmaceutical products.
Weekly Forecast Monitor: Feb. 21, 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 diplomatic de-escalation as a U.S. delegation led by Secretary of State Marco Rubio met with a Russian delegation led by Foreign Minister Sergey Lavrov in Riyadh, where they agreed to form high-level teams to discuss details on ending the war. Ukrainian diplomats were excluded from the summit. U.S. Special Envoy to Ukraine and Russia Keith Kellogg met with Zelenskyy and top Ukrainian defense officials in Kyiv to discuss peace efforts on Thursday, a day after Trump falsely accused Ukraine of starting the war and called Zelenskyy a “dictator.” National Security Advisor Mike Waltz announced that U.K. Prime Minister Keir Starmer and French President Emmanuel Macron will visit the White House next week to discuss peace efforts in Ukraine. Zelenskyy rejected a request from U.S. Treasury Secretary Scott Bessent for the rights to 50% of Ukraine’s rare earth minerals, citing a lack of security commitments from the U.S. in the proposal. Starmer called for the formation of a combined European peacekeeping force in Ukraine of up to 30,000 soldiers. Russian Foreign Ministry spokeswoman Maria Zakharova said NATO must revoke its 2008 commitment to Ukraine for eventual membership in the alliance as a condition for a peace agreement.
2 Middle East
Summary
The Middle East trended toward diplomatic de-escalation and military escalation scenarios as Israeli forensics experts claimed Hamas failed to properly identify the remains of a deceased hostage returned to Israel and Netanyahu declared that Hamas violated the cease-fire. Hamas exchanged three Israeli hostages in return for 369 Palestinian prisoners on Feb. 15, and committed to releasing six living hostages in an exchange scheduled for Saturday. Israel and Hamas have agreed to begin the delayed second phase of cease-fire negotiations, originally scheduled to have begun Feb. 2, by the end of this week. Hamas has offered to release all remaining hostages at once in exchange for a permanent end to the war and a full Israeli withdrawal from Gaza, while Israel’s conditions for the second phase of negotiations include the disarmament and complete removal of Hamas in Gaza. Saudi Crown Prince Mohammed bin Salman invited the leaders of the Gulf Cooperation Council countries as well as Egypt and Jordan to Riyadh on Feb. 21 to coordinate on Gaza-related policy issues prior to an emergency meeting of the Arab League on March 4. Israeli forces remained in Lebanon beyond the previously extended withdrawal date of Feb. 18, violating their cease-fire agreement.
3 U.S./China/Indo-Pacific
Summary
Tensions in the Indo-Pacific trended toward hybrid escalation as China lodged official complaints about U.S. tariffs to the World Trade Organization. Trump said he planned to receive Chinese President Xi Jinping in Washington without offering an exact date. Taiwanese President Lai Ching-te vowed to defend the island’s sovereignty, allocating extra provisions for an increased defense budget, while the U.S. State Department asserted its commitment to Taiwan’s defense in line with the Taiwan Relations Act. The Australian military monitored three Chinese warships that sailed close to its waters and held an unannounced live fire exercise in the Tasman Sea.
4 Other Hotspots
United States
- Trump said he would impose 25% tariffs or higher on imported automobile, semiconductor, and pharmaceutical products, with a formal decision expected April 2. He further said the U.S. would consider other countries’ value-added tax systems equivalent to tariffs in its calculations for imposing reciprocal tariffs. Forecast – hybrid escalation scenario
Democratic Republic of the Congo
- Rwanda-backed rebels captured the Democratic Republic of the Congo’s second-largest city, Bukavu, while reopening ports on captured lakeside cities, which would allow for a resumption of humanitarian aid to the areas. Fighting continued in the town of Uvira, which resulted in government forces fleeing their posts. Forecast – security stabilization scenario
Brazil
- Former President Jair Bolsonaro was indicted on charges related to schemes in 2022 aimed at annulling elections, disbanding the courts, empowering the military, and assassinating the newly elected president. Forecast – political destabilization scenario
The Global Connectivity Tracker examines the impact of geopolitical dynamics on key themes like trade, technology, and energy/climate.
United States
Energy
What Happened
Texas power grid operator ERCOT warned that electricity demand is projected to exceed supply starting in summer 2026, leading to potential shortages.
Significance/Outlook
ERCOT projects that power demand in Texas will nearly double by 2030, driven by population growth, extreme weather, and energy-intensive industries such as crypto mining, data centers, and oil and gas electrification. As a result, power shortages during peak summer demand are expected to reach 6.2% in 2026 and grow to 32.4% by 2029, with winter shortages also anticipated. While ERCOT’s worst-case scenario raises concerns about grid reliability, experts caution that these estimates may be inflated due to a 2023 legislative change that altered how ERCOT calculates future demand. Meanwhile, ongoing investments in renewable energy, such as new solar and wind projects, along with natural gas developments, could help stabilize supply and mitigate potential shortages.
China/Brazil
Lithium
What Happened
China’s BYD, a leading electric vehicle (EV) and battery manufacturer, secured mining rights in Brazil’s Lithium Valley in late 2023, marking its first mining project in Latin America.
Significance/Outlook
This project strengthens BYD’s supply chain while reinforcing Brazil’s role in the global lithium industry. Located in Coronel Murta, Minas Gerais, within Brazil’s Lithium Valley, the site remains in the research phase, with no operating revenues. According to Visconti Law, a firm specializing in the mining sector, the development time for Brazilian mining projects to achieve production is typically 8 to 15 years. At 512 miles from BYD’s planned EV factory in Bahia, the mining site is expected to support local lithium sourcing for battery production, enhancing the company’s EV manufacturing capabilities in Latin America.
Türkiye/Turkmenistan
Natural Gas
What Happened
According to Turkish Energy Minister Alparslan Bayraktar, Türkiye and Turkmenistan have reached an agreement to facilitate natural gas transit from Turkmenistan to Türkiye via Iran.
Significance/Outlook
Türkiye may get up to 2 billion cubic meters of Turkmenian gas per through Iran’s natural gas network under this deal. This agreement will strengthen Türkiye-Turkmenistan strategic cooperation and natural gas supply security for Türkiye. Under the terms of this new natural gas purchase, Türkiye will partially replace its 25-year agreement with Iran, which is set to expire in 2026. The new agreement will enable Türkiye to diversify its gas supply, reduce expenses, and boost its competitiveness. This new agreement will be beneficial to Turkmenistan because it will open new export routes and expand natural export markets.
Kazakhstan/China
Natural Gas
What Happened
Kazakhstan’s state-owned gas pipeline operator and producer QazaqGaz and Chinese business PetroChina International have agreed to enhance natural gas exports to China in 2025.
Significance/Outlook
In 2023, Kazakhstan and China signed a three-year contract to ship up to 10 billion cubic meters of gas per year to China. The new contract amendment will help to increase the volumes of natural gas to satisfy Chinese market demand. Kazakhstan and China are strengthening their strategic energy partnership with this move, which also helps to consolidate Kazakhstan’s position as a natural gas exporter. These exports will lead to increased revenue and boost Kazakhstan’s economy. Although exports are on the rise in Kazakhstan, the country’s focus remains the domestic market.
China
Coal
What Happened
China embarked on a significant expansion of coal-fired electricity in 2024, with construction commencing on 94.5 gigawatts worth of new plants as it grapples with increasing power demands, a report from the Centre for Research on Energy and Clean Air states.
Significance/Outlook
China added a record 356 GW of wind and solar power resources last year, but some of that capacity has gone unsold and unused as competition increases for the limited space on China’s power grid. The country is the globe’s largest consumer of coal, accounting for 56% of demand in 2024, according to the International Energy Agency. China produces about 30 percent of global greenhouse emissions, but President Xi Jinping has pledged that its carbon emissions will peak by 2030 and it will achieve net zero by 2060. The report noted that existing long-term contracts have locked electricity buyers into coal-fired generation and that three-quarters of the new coal plant construction has been financed by coal mining companies.