This week in the Middle East, Iran questioned cooperation with the International Atomic Energy Agency and reportedly received a delivery of Chinese air defense systems, while Israeli Defense Minister Israel Katz unveiled plans to relocate Gazans to third countries. In the Russia/Ukraine conflict, U.S. President Donald Trump expressed frustration at Russia’s lack of meaningful ceasefire efforts and renewed U.S. weapons shipments to Ukraine, while both the U.S. Congress and the EU are preparing new sanctions against Moscow. In the Indo-Pacific, Trump renewed his threats of tariffs against ASEAN countries, plus Japan and South Korea. He further threatened to levy additional tariffs against Brazil and on all copper exports to the U.S. and extended the deadline for all trade negotiations to Aug. 1.
Weekly Forecast Monitor: July 11, 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 escalation as the U.S. resumed weapons shipments to Ukraine after a weeklong pause. Russia intensified its bombardment of Ukrainian cities, and Russian forces reported minor advances in the Kharkiv, Donetsk, and Dnipropetrovsk regions. Trump expressed frustration with Russian President Vladimir Putin over his unwillingness to advance peace talks in Ukraine and voiced his support for possible new sanctions on Russia. U.S. congressional leaders are preparing to move forward with a bipartisan sanctions package that would impose tariffs on importers of Russian energy. Meanwhile, French Foreign Minister Jean-Noël Barrot said the EU is preparing its “toughest” sanctions against Russia in years in a coordinated effort with the U.S. Senate. Russian Foreign Minister Sergei Lavrov said Moscow will not agree to a ceasefire until all sanctions against Russia have been lifted and its assets are returned.
2 Middle East
Summary
The Middle East trended toward military escalation as the Israeli Ministry of Defense briefed reporters on plans to forcibly relocate Palestinians into an internment zone in southern Gaza, and eventually to third countries. Qatari officials mediated talks between Israel and Hamas that ended without achieving a ceasefire or hostage release deal, as direct meetings between Trump and Israeli Prime Minister Benjamin Netanyahu ended without major policy announcements. China reportedly transferred surface-to-air missiles to Iran as the de-facto ceasefire between Iran and Israel began. Meanwhile, Iranian President Masoud Pezeshkian said the IAEA should drop its “double standards” if it intends to resume work inside Iran, and Iranian Supreme Leader Ayatollah Ali Khamenei made his first public appearance since the cessation of hostilities with Israel. Al-Houthi militants sank two commercial shipping vessels in the Red Sea, causing at least four casualties and taking an unknown number of hostages in addition to firing a missile at Israel’s Ben Gurion Airport.
3 U.S./China/Indo-Pacific
Summary
The Indo-Pacific trended toward hybrid escalation as the U.S. threatened to impose reciprocal tariffs on members of the Association of Southeast Asian Nations, as well as Japan and South Korea, pushing back the deadline for trade negotiations until Aug. 1. ASEAN foreign ministers in turn met with their Chinese counterpart, vowing to seek deeper ties with Beijing amid trade uncertainty with the United States. Brazil hosted this year’s BRICS summit in Rio de Janeiro, where Brazilian President Luiz Inácio Lula da Silva pledged to increase trade and defense relations with India, while Trump threatened to impose tariffs on the bloc. Japan agreed to export six naval destroyers to the Philippines, in line with recent bilateral pledges to boost defense cooperation.
4 Other Hotspots
Poland/Germany
Poland launched border inspections on vehicles entering from Germany, retaliating after similar checks were instituted by Germany. With the inspections, both countries have violated the EU’s Schengen Area agreement. Forecast – hybrid escalation scenario
United States
Elon Musk announced he was launching the America Party, posting on X that he wanted to challenge the country’s two-party system. The Trump administration deported eight people who were nearing the completion of prison sentences to South Sudan, and the Supreme Court ruled that the administration was legally allowed to fire federal workers and dismantle federal agencies. Forecast – political destabilization scenario
Kenya
Protests commemorating a 1990 uprising against the government turned violent, resulting in at least 31 deaths and 107 injuries. The National Commission on Human Rights reported two forced disappearances after the protests ended. 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
Clean Energy
What Happened
U.S. President Donald Trump signed the “Big, Beautiful Bill” tax cut and spending measure that significantly reduces tax credits for solar and wind energy projects.
Significance/Outlook
The measure will reduce by 30% the tax credits for renewable energy projects such as solar and wind generation that had been set to expire in 2032. Other clean energy technologies such as nuclear, hydro, and geothermal will have better access to tax credits. This move will affect the energy transition and the climate targets in the U.S. by 2030 since solar and wind represent a high share of the country’s renewable energy portfolio. An analysis by the research firm Energy Innovation estimates the measure will result in a decline of 340 gigawatts (GW) in U.S. electricity generation capacity by 2035 even as demand is increasing, driven by increasing development of emerging technologies such as AI data centers.
United States
Fusion Energy
What Happened
In the first deal of its kind, Google Inc., has signed a contract directly with Bill Gates-backed startup Commonwealth Fusion Systems to purchase 200 megawatts of electricity once its first power fusion-powered generation plant begins commercial production. Commonwealth Fusion expects that plant to come online within a decade.
Significance/Outlook
The multibillion-dollar deal will give Google rights to about half the expected generation from Commonwealth Fusion’s first plant, which is under development in Virginia. Google, which has aimed to secure clean energy sources to power its data centers, said it made deals to buy 8 gigawatts of carbon-free energy in 2024 and reduced its data center emissions by 12% even as their power demands grew.
Canada/Asia
Liquefied Natural Gas
What Happened
An initial liquefied natural gas shipment from the export facility in Kitimat, British Colombia, marked Canada’s entry into the LNG export market.
Significance/Outlook
The shipment, the volume of which was not disclosed, is bound for Japan. The milestone comes as increasing trade tensions with the United States provides impetus for Canada to diversify its energy exports. The $40 billion (Canadian) LNG terminal has been characterized as the country’s largest-ever private investment. Canada ranks as the globe’s fifth-largest natural gas producer and the fourth-largest exporter, although most of those exports had previously been sent to the United States.
United Kingdom
Wind Energy
What Happened
British Energy Minister Michael Shanks announced a new policy aimed at boosting onshore wind production and increasing renewable energy capacity in the United Kingdom.
Significance/Outlook
The expansion of onshore wind will boost British energy security by reducing its dependence on fossil fuels and speed the decarbonization of the power sector to reach climate goals by 2030. It will also have social and economic benefits by providing clean energy and creating jobs.
Australia/Qatar
Liquefied Natural Gas
With this agreement, Santos strengthens its position in Asian LNG markets and deepens its partnership with QatarEnergy Trading. Santos’ Exports from Alaskan LNG terminal will significantly cut shipping times for QatarEnergy's Asia-Pacific customers, with shipments to Japan taking an average of eight days, compared to 16 days if dispatched from its Middle East facilities and 23 days for shipments from U.S. Gulf Coast terminals.
What Happened
Australian oil and natural gas producer Santos has signed a mid-term contract to supply liquefied gas to QatarEnergy Trading. Under the two-year deal, Santos would supply 500,000 metric tons of LNG annually starting in 2026.
Significance/Outlook
Asian demand for LNG continues to be exceptionally strong. As the company’s Barossa project in Australia and its Pikka Phase 1 project in Alaska near completion, Santos expects a 30% increase in oil and gas production during the next 18 months compared to 2024.