On his diplomatic tour of the Middle East’s Gulf region this week, President Donald Trump announced the U.S. will lift sanctions against Syria. U.S. Special Envoy Steve Witkoff, meanwhile, presented Iran with a written proposal for a nuclear deal. Russian President Vladimir Putin did not show up to planned negotiations with Ukrainian President Volodymyr Zelenskyy in Istanbul, though representatives from Russia, Ukraine, the U.S., and Türkiye held a meeting. The U.S. and China agreed to pause reciprocal tariffs for 90 days and remove key export and import bans as trade negotiations progress, and China pledged increased investment to Latin American countries.
Weekly Forecast Monitor: May 16, 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 delegations led by U.S. Secretary of State Marco Rubio, Ukrainian Foreign Minister Andrii Sybiha, and Russian cultural minister and Kremlin aide Vladimir Medinsky met in Istanbul on May 16 for negotiations. The meeting followed Putin’s rejection of an offer by Zelenskyy for the two leaders to negotiate directly. Instead, Zelenskyy met with Turkish President Recep Tayyip Erdoğan in Ankara. The EU passed its 17th Russian sanctions package, targeting over 200 entities involved in energy exports, defense production, and disinformation campaigns. Russia carried out missile and drone attacks against cities across Ukraine.
2 Middle East
Summary
The Middle East trended toward diplomatic de-escalation as Trump signed defense and economic agreements with Saudi Arabia, Qatar, and the UAE during his first diplomatic tour of his second term. Witkoff presented Iranian officials with a written proposal for a nuclear deal during a May 11 meeting in Oman. Trump met with interim Syrian President Ahmed al-Sharaa along with Saudi Crown Prince Mohammed bin Salman in Riyadh, where he announced the U.S. will lift sanctions against Syria and work toward full normalization of relations, and urged al-Sharaa to normalize relations with Israel. The UAE is mediating talks between Syria and Israel on the possibility of Syria joining the Abraham Accords. The Kurdistan Workers’ Party (PKK) announced that it will disband and disarm, following an appeal from founder Abullah Ocalan, ending the group’s 41-year insurgency against Türkiye. In addition to the Russia-Ukraine peace talks, Türkiye hosted a NATO foreign ministers meeting and nuclear talks between Iran and the U.K., France, and Germany. Hamas released its final living American hostage, and Israeli airstrikes killed hundreds of Palestinians across Gaza.
3 U.S./China/Indo-Pacific
Summary
Tensions in the Indo-Pacific trended toward diplomatic de-escalation, as China and the U.S. issued a 90-day reduction of tariffs and canceled various export and import bans. Beijing criticized the U.K.-U.S. trade deal signed last week, calling it detrimental to Chinese international trade. China pledged increased investment in Latin America following a forum between China and the Community of Latin American and Caribbean States. India offered the U.S. a deal that includes a “no tariffs” proposal ahead of trade talks next week, while Trump warned Apple Inc. not to move production lines to India. New Delhi condemned a Chinese bid to rename a disputed border region. A Taiwanese official warned of the possibility of large-scale Chinese military drills next week during the first anniversary of President Lai Ching-te’s inauguration.
4 Other Hotspots
India/Pakistan
Both countries agreed to a ceasefire following reported diplomacy from the United States, though heavy fire exchanges still took place across the border following the ceasefire. Indian Prime Minister Narendra Modi warned that India would resume strikes against “terrorist hideouts” in Pakistan if new attacks targeted India. Forecast – diplomatic de-escalation scenario
United Kingdom
Prime Minister Keir Starmer vowed to significantly cut net migration over the next four years, following victories for the right-wing Reform UK party in local elections. Forecast – political destabilization scenario
Mali
The leader of the military junta, Assimi Goïta, signed a decree officially dissolving all political parties as a means to stifle recently growing voices of dissent against plans for Goïta to remain in power until 2030. Demonstrators have taken to the streets to protest alleged mass killings by the government. Forecast – political destabilization scenario
The Global Connectivity Tracker examines the impact of geopolitical dynamics on key themes like trade, technology, and energy/climate.
1
United States
Nuclear Power
What Happened
In an effort to speed construction of new nuclear power generation infrastructure, the administration of U.S. President Donald Trump is drafting executive orders that would reduce regulations surrounding its development, including ones limiting acceptable levels of radiation exposure, the Washington Post reported.
Significance/Outlook
The push to reduce regulations on nuclear plants, seen by some in the industry as an impediment to their timely development, comes as the United States is seeking to expand its fleet of commercial reactors. The possible overhaul of the regulatory process comes as the White House has moved to exert more control over the Nuclear Regulatory Commission (NRC), an independent agency established by Congress and governed by a board of presidential appointees, to oversee the country’s use of nuclear energy. The NRC is now required to submit any new reactor safety regulations to the Office of Budget and Management for review and possible revision.
2
Brazil
Critical Minerals
Brazil can change global supply chains and strengthen its economy due to its vast REE resources. Technological advancement and initiatives to switch to a more sustainable energy source are increasing global demand for these vital minerals. Prices are projected to grow dramatically in the future. This decision will benefit the U.S. since the Trump administration is seeking for new REE suppliers and establishing rare-earth processing and magnet-making facilities to reduce its dependence on China.
What Happened
Serra Verde Group, a mining company based in Brazil, is taking steps to expand its capacity for the production and processing of rare earth elements (REEs). Additionally, the company is working to build strategic partnerships with other companies and countries, as well as to attract international investment.
Significance/Outlook
Brazil has the potential to become a major competitor to China in the strategically significant REE market. There are approximately 21 million metric tons of rare-earth oxides in Brazil, making it one of the top reserves in the world. By 2026, Serra Verde Group plans to provide 5,000 metric tons of rare earth oxides. The demand for rare earth oxides is expected to climb 8.5% annually until 2035.
3
India/United States
Oil
While these negotiations are taking place under tariff pressure, India ultimately stands to benefit. The shift toward U.S. crude aligns with its broader strategy to diversify energy sources and reduce reliance on its traditional suppliers. At the same time, increased energy trade offers India added leverage in its broader commercial negotiations with Washington.
What Happened
India increased its U.S. crude oil imports to 326,000 barrels per day in April, up from 244,000 in March, a nearly 34% rise.
Significance/Outlook
The surge, led by big state refiners like Indian Oil and Bharat Petroleum, serves both to diversify energy sources and to strengthen India’s trade position with the United States. Over 11 million barrels are set to arrive in June, the highest volume since August 2024. By boosting U.S. energy purchases, India signals its willingness to ease trade imbalances, potentially securing tariff concessions. The trajectory of future growth will likely depend on shifts in global oil prices, particularly how competitive U.S. crude remains, as well as India’s domestic energy demand and broader geopolitical developments.
4
United States/China/Iran
Oil
The move increases pressure but avoids triggering market-wide or geopolitical backlash. The absence of action against larger state-owned energy firms significantly limits the risk of broader disruption or diplomatic escalation, but if China continues its energy engagement with Iran, further escalatory measures remain likely, potentially intensifying tensions between Washington and Beijing.
What Happened
The U.S. sanctioned Hebei Xinhai Chemical Group, a major Chinese independent refinery, along with port and shipping firms, for facilitating Iranian oil shipments in violation of U.S. sanctions.
Significance/Outlook
In addition to Xinhai, the sanctions targeted firms such as Shandong Jingang Port Co. and Star Twinkle Shipping, which helped import Iranian oil through terminals like Dongying Port, using vessels linked to Iran’s shadow fleet. These measures reflect Washington’s ongoing effort to curtail Iran’s oil revenue as a means of exerting pressure on its nuclear ambitions and regional activities. Their timing, just days ahead of a new round of U.S.-Iran nuclear talks, underscores their strategic significance. However, while the sanctions have effectively pressured smaller Chinese importers, the United States has refrained from targeting major state-owned energy enterprises.
5
South Korea/Czech Republic
Nuclear Power
What Happened
A Czech court stopped the government from signing a contract with South Korean company Korea Hydro and Nuclear Power (KHNP) to build two nuclear plants.
Significance/Outlook
The $18 billion deal would represent South Korea’s first big overseas nuclear power project in 15 years. KHNP was scheduled to sign nuclear power contracts after beating France’s EDF and the U.S.’s Westinghouse, but EDF sued over complaints about the bid review process. KHNP has begun negotiations with Finland, Sweden, and the U.K. as more European countries look to nuclear to replace fossil fuels. The Czech Republic said it will continue project preparations despite the legal challenge.