This week, the Hamas/Israel ceasefire collapsed after Israeli forces launched an air and ground assault in Gaza, while the U.S. Navy engaged al-Houthi targets in Yemen. Russia and Ukraine agreed to a 30-day cessation of attacks on energy infrastructure, while Russian missile and drone attacks continued across Ukraine. In the Indo-Pacific, reports emerged that the U.S. Department of Energy designated South Korea as a “sensitive country,” potentially hindering its technology cooperation with the U.S., while the Trump administration tightened sanctions against Chinese importers of Iranian oil.
Weekly Forecast Monitor: March 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 the two countries agreed to a temporary ceasefire halting strikes against energy infrastructure. No timeline for implementation was announced, and Russia continued to conduct strikes against cities across Ukraine. The agreement was reached after a phone call between U.S. President Donald Trump and Russian President Vladimir Putin in which Putin refused to commit to a more encompassing ceasefire brokered by the U.S. and already agreed to by Ukraine. Ukrainian President Volodymyr Zelenskyy said U.S. and Ukrainian delegations will meet in Riyadh “in the coming days” to discuss implementation details, while U.S. and Russian officials are scheduled to hold separate talks in Jeddah on March 23. Russia and Ukraine conducted a prisoner-of-war exchange mediated by the United Arab Emirates, with each side releasing 175 prisoners. European Commission Vice President Kaja Kallas called for Europe to provide $5.4 billion to Ukraine for artillery shells, and EU leaders pledged $868 billion in defense spending over the next four years. European defense officials in London discussed plans for a 20,000-troop “reassurance force” in Ukraine. In response, Kremlin spokesman Dmitry Peskov accused Europe of valuing “militarization” over peace efforts.
2 Middle East
Summary
Conflicts in the Middle East trended toward military escalation as the ceasefire between Israel and Hamas in Gaza collapsed when Israel killed over 500 Palestinians in airstrikes and resumed a ground offensive in the territory. The Egyptian government denied a Lebanese newspaper’s report claiming Egyptian President Abdel Fattah al-Sisi would be willing to host up to half a million displaced Palestinians from Gaza in the Sinai. Israel also conducted airstrikes against military infrastructure in Syria and Hezbollah targets Lebanon. The U.S. carried out a series of attacks targeting al-Houthi militants in Yemen, killing dozens, and the Houthis retaliated by attacking the USS Harry Truman carrier group in the Red Sea, causing no casualties, and by firing a missile toward Tel Aviv’s Ben Gurion airport that the Israel Defense Forces intercepted before it entered Israeli airspace. Syria and Lebanon agreed to a ceasefire after border clashes erupted between the Syrian army and Lebanese militants, resulting in dozens of casualties. Meanwhile, Iran’s foreign ministry promised a response to Trump’s letter to Iranian Supreme Leader Ayatollah Ali Khamenei, after the letter was reviewed with “full scrutiny.” Trump’s letter threatened potential military action against Iran if a nuclear agreement was not reached within two months. The White House is set to host a delegation of Israeli officials next week to discuss the possibility of joint U.S./Israeli military action against Iran.
3 U.S./China/Indo-Pacific
Summary
Tensions in the Indo-Pacific trended toward hybrid escalation, as South Korean media reported the U.S. Department of Energy had designated South Korea as a “sensitive country” in January, a designation shared with Iran, North Korea, and China, which may hinder technology cooperation between the countries. The U.S. added further sanctions to Chinese oil companies for importing oil from Iran. China deployed large amounts of naval and air assets around Taiwan in response to Taiwanese President Lai Ching-te’s comments last week supporting Taiwanese sovereignty. China’s economy showed signs of recovery, with better-than-expected industrial production and electric vehicle sales boosting Asian markets. The governors of Arizona and Alaska separately traveled to Taiwan to discuss bilateral trade. The Philippines sent a delegation to India to start talks on expanding their countries’ nickel trade.
4 Other Hotspots
United States
Trump signed an executive order calling for the dismantling of the Department of Education. Radio Free Europe and Radio Liberty are suing the Trump administration following an executive order targeting the U.S. Agency for Global Media, the parent company of Voice of America. Forecast – political destabilization scenario
Serbia
An estimated 100,000 people mobilized on the streets of Belgrade to protest President Aleksandar Vučić, after months of smaller protests against the government. Forecast – political destabilization scenario
Democratic Republic of the Congo/Rwanda
DRC President Félix Tshisekedi and Rwandan President Paul Kagame have called for an immediate ceasefire, while the M23 rebel group continued its advance into Congolese territory. Forecast – security stabilization scenario
The Global Connectivity Tracker examines the impact of geopolitical dynamics on key themes like trade, technology, and energy/climate.
1
Global
Oil
Disruptions in the Red Sea threaten global oil supply stability, as attacks on shipping routes force costly detours and delay deliveries. At the same time, newly imposed U.S. tariffs and fluctuations in China’s demand create economic uncertainty, affecting long-term oil consumption trends. These combined factors contribute to market volatility and drive up oil prices.
What Happened
Oil prices rose slightly throughout the week as the U.S. intensified military actions against al-Houthi militants in Yemen and added sanctions to Iran’s oil exports.
Significance/Outlook
Brent crude prices rose 0.7% from $70.58 to $71.07 per barrel on Monday after U.S. air and naval strikes targeted Houthi military assets in the Red Sea port city of Hodeidah and Al Jawf governorate in Yemen. The U.S.’s sanctions against Iranian oil caused prices to rise further to $72 a barrel on Thursday. In addition, stronger-than-expected Chinese retail sales growth in January and February signaled rising consumer demand, further boosting prices. Official data showed a 2.1% year-on-year increase in crude oil processing in China, driven by higher domestic consumption and refinery expansions. While OPEC+ plans to raise oil production in the beginning of April, which would typically drive prices lower, the prospect of stricter U.S. sanctions on Iran and newly imposed U.S. tariffs could counterbalance this effect.
2
United States
Energy
Investment in renewable energy will decrease as U.S. fossil fuel output rises. The change in policy has made the road ahead more challenging for some U.S. energy transition initiatives. This move will help China to gain more market and renewable energy share and expedite the development of new and innovative solar photovoltaic, wind turbine, EV, and battery technologies.
What Happened
The S&P Global Clean Energy Transition Index, which monitors the performance of big renewable energy companies, fell by 12.5% over the last year.
Significance/Outlook
Uncertain political backing for clean energy, rising interest rates, and a shift in energy policies are negatively affecting the green energy market. Trump’s decision to reverse the Biden administration’s clean energy and climate policies sent mixed signals to investors. Green energy companies will have a more challenging time obtaining financing and support as a result of this change. In Europe, political instability and energy security have presented obstacles to lessening the continent’s reliance on fossil fuels. As a consequence of these political and economic factors, the market has been depressed, and green energy stocks have fallen to levels that were last seen five years ago.
3
United States
Critical Minerals
What Happened
Trump proposed building metal refining plants on U.S. military bases to increase local production of critical minerals and reduce dependency on China.
Significance/Outlook
If implemented, Trump’s proposal would increase the quantity of rare earths and important critical minerals produced in the United States. Building these processing facilities on military sites would boost domestic supplies faster. Forecasts expect the development of innovative technologies for military and energy applications will boost the demand for essential minerals. It is expected to double critical mineral consumption by 2040, growing the critical minerals market from $325 billion in 2023 to $770 billion. China controlled the production of 30 of the 50 U.S.-designated critical minerals in 2022 and supplied more than half of U.S. imports for 19 critical minerals. China’s dominance of the critical mineral sector affects global supply chains. The U.S. is diversifying its sources, encouraging domestic industry, and strengthening its international ties to reduce its reliance on Chinese imports.
4
Cuba
Electricity
What Happened
A short in a power transmission line last week led to a cascade failure of the Cuban electrical grid, precipitating a two-day nationwide blackout.
Significance/Outlook
Cuba’s fourth blackout since October highlights its continuing struggles to provide reliable electricity to its population. The grid failure exacerbated issues with electricity delivery, which relies on antiquated oil-fired power plants that caused previous blackouts when oil supplies from Venezuela and Mexico ran short. Cubans have routinely endured days of spotty power, with some experiencing daily rolling blackouts that have lasted hours. The country has blamed the U.S. economic embargo and recent stringent sanctions imposed by Trump for extending its power woes. The government is working to develop large-scale solar power installations with China’s assistance in an effort to boost power supplies.
5
Qatar/Syria
Natural Gas
Amid severe energy shortages caused by war-damaged infrastructure and fuel scarcity, this increase in electricity generation provides short-term relief for Syria while fostering regional cooperation and economic engagement. However, its long-term impact will depend on whether it paves the way for sustained infrastructure investments or remains a temporary energy solution.
What Happened
Qatar plans to supply 2 million cubic meters of natural gas per day to Syria through Jordan via the Arab Gas Pipeline.
Significance/Outlook
This agreement was facilitated by the Qatar Fund for Development, with support from Jordan and the United Nations Development Program and the U.S. easing sanctions until June to facilitate the transaction. The fuel will pass through Jordan and be delivered to Syria’s Deir Ali power station via a floating liquefaction vessel in Aqaba, adding 400 megawatts to the grid. Once implemented, the deal is expected to double daily state-supplied electricity from two to four hours per day and could encourage further international support and investment in Syria’s economic recovery.