This week, U.S. President Donald Trump threatened to impose strong economic sanctions against Russia ahead of an expected meeting with Russian President Vladimir Putin. In the Middle East, Israel’s State Security Cabinet approved a plan by Prime Minister Benjamin Netanyahu to take control of Gaza City, while the U.S. is set to take over aid operations in the Gaza Strip. In the Indo-Pacific, Trump imposed an additional 25% tariff on India for its purchases of Russian oil, while Thailand and Cambodia signed a ceasefire deal. In global trade, reciprocal tariffs against U.S. trading partners went into effect, with threats of additional tariffs remaining on several key partners, including the European Union.
Weekly Forecast Monitor: Aug. 8, 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 hybrid escalation as Trump is expected to enact sanctions and tariffs against Russia and its key trading partners on Aug. 8. U.S. and Russian officials said Trump and Putin have agreed to meet next week, with Putin favoring the UAE as the location for the summit. Turkish President Recep Tayyip Erdoğan is scheduled to visit Kyiv next week to discuss peace efforts and trade agreements with Ukrainian President Volodymyr Zelenskyy. The U.S. Department of State approved a $200 million military aid package for Ukraine. The Russian Ministry of Foreign Affairs announced that Russia would no longer abide by self-imposed restrictions on the deployment of short- and medium-range nuclear missiles.
2 Middle East
Summary
The Middle East trended toward military escalation as Israel’s State Security Cabinet approved Netanyahu’s plan for the complete occupation of Gaza City, despite objections from senior leadership of the Israel Defense Forces. Netanyahu said the goals of the operation will be the destruction of Hamas and the release of the remaining hostages. In response, Germany paused the shipment of all arms that the IDF may use in Gaza. Trump said the decision to fully occupy the territory is “pretty much going to be up to Israel” as U.S. officials are reported to be planning to “take over” humanitarian aid operations in the territory. Israeli forces killed at least 38 Palestinians in Gaza who had been seeking aid from U.N. convoys and another 25 in airstrikes. The Lebanese government ordered its army to establish a monopoly on arms inside the country; Hezbollah leaders vowed to resist the move.
3 U.S./China/Indo-Pacific
Summary
The Indo-Pacific trended toward hybrid escalation as Trump signed an executive order imposing an additional 25% tariff on imports from India for its purchase of Russian oil while warning China of similar tariffs if it continues with its own purchases. Thailand and Cambodia signed a ceasefire deal, building on a truce from last week, which will see displaced residents allowed to return to their homes while keeping border troops in place to prevent escalation. Trump threatened to impose 100% tariffs on imports of semiconductors, with the exception those made by companies that are or have committed to manufacturing in the United States. Chinese exports of rare earth elements slumped in July following a record high in June; the decrease has not been attributed to any single cause. Malaysia confirmed the attendance of Chinese President Xi Jinping at the ASEAN summit later this year, potentially setting the stage for a Trump/Xi meeting. India and the Philippines held joint naval drills in the South China Sea for the first time.
4 Other Hotspots
United States
Texas Republicans have called on law enforcement, including the FBI, to apprehend Democratic lawmakers who have fled the state to block Republicans’ attempts to redraw congressional voting maps prior to the midterm elections. Forecast – political destabilization scenario
United States/European Union
Trump warned the bloc that it would need to honor its pledge to invest $600 billion in the U.S. or he would raise the blanket tariffs on EU imports to 35%. Forecast – hybrid escalation scenario
Armenia/Azerbaijan
The U.S. will host the leaders of both countries, where they are expected to sign a peace framework agreement. Under the agreement, both countries will grant the U.S. exclusive special development rights on a South Caucasus transit corridor, named the Trump Route for International Peace and Prosperity. Forecast – diplomatic de-escalation scenario
The Global Connectivity Tracker examines the impact of geopolitical dynamics on key themes like trade, technology, and energy/climate.
1
Global
Oil
What Happened
OPEC+ agreed to raise oil production by 547,000 barrels per day (bpd) in September.
Significance/Outlook
The increase reflects growing confidence in market fundamentals, with prices recovering to around $70 per barrel. It will help ease tight global supply amid rising seasonal demand and low inventories, potentially preventing further spikes in oil prices. OPEC+ has now fully reversed its largest rounds of production cuts ahead of schedule, continuing a series of output increases aimed at regaining market share. In addition, the UAE was granted a separate special increase of approximately 300,000 bpd as part of a broader agreement to adjust its baseline production levels. This decision may also be influenced by broader geopolitical dynamics, including U.S. efforts to pressure Russian allies, which may affect both market stability and OPEC+ cohesion. An additional review of output cuts is scheduled for September.
2
United States
Wind Energy
Wind energy, which has increased by a third since 2020, is a small but significant part of the U.S. electricity generation picture, accounting for over 10% of utility-scale generation in 2022, according to the U.S. Energy Information Administration. Federal pressure against the industry could reverse the growth trend, constraining electricity supply at a time of increasing demand, causing energy prices to rise.
What Happened
The U.S. Department of the Interior has canceled the designation of wind development areas that had applied to 3.5 million acres of federally controlled ocean off U.S. coasts that had been deemed most suitable for offshore wind development.
Significance/Outlook
The reversal of the designation by the Interior Department’s Bureau of Ocean Energy Management follows other executive orders that tightened regulations on solar and wind power development and halted federal permitting and loans for all wind projects. The U.S. Department of the Interior is also developing plans to remove federal land from consideration for onshore wind projects.
3
Europe
Climate
What Happened
Scientists warned that damage to European forests caused by prolonged drought, massive and frequent wildfires, logging, and invasive insects and diseases is lowering long-term carbon sequestration capability and threatening EU emissions targets.
Significance/Outlook
The EU emissions goal is essential to fighting climate change. The EU wants to cut emissions by 55% by 2030 and aims for net-zero greenhouse gas emissions by 2050. Climate mitigation strategies include reducing fossil fuel use, shifting to renewable energy, improving energy efficiency, and developing clean energy technologies. Forests are a major and widely available natural carbon capture storage option. However, as deforestation, degradation, and wildfires become more severe and frequent, forests’ ability to sequester carbon dioxide will decrease.
4
United States/India/Russia
Oil
What Happened
U.S. President Donald Trump imposed an additional 25% tariff on Indian goods in response to New Delhi’s continued imports of Russian oil, doubling the existing rate to a total of 50%. The measure is set to take effect within 21 days.
Significance/Outlook
This step marks one of the sharpest trade escalations between Washington and New Delhi in recent years, using broad tariffs as geopolitical leverage. The decision shows the U.S.’s willingness to tie trade policy to foreign policy objectives, particularly in curbing revenues flowing to Russia. The Indian government reacted strongly, describing the tariff hike as unfair and politically motivated. A government spokesperson stressed that India’s energy imports are driven by market realities and the need to safeguard supplies for its 1.4 billion citizens, and that India would take whatever measures are required to defend its national interests.
5
United States/Japan
Liquefied Natural Gas
What Happened
U.S. energy infrastructure company Sempra announced an agreement to sell 1.5 million metric tons of liquefied natural gas (LNG) per year for 20 years to Japanese power generation company JERA.
Significance/Outlook
The U.S. is the leading exporter of LNG in the world, and it is increasing its export capacity with projects such as Sempra’s Port Arthur terminal in Texas and the Sempra-developed Costa Azul LNG project in Mexico. The deal helps Japan meet its economic and environmental goals while improving its energy security and price stability. Long-term contracts such as the one with Sempra help diversify Japan’s LNG suppliers, reducing supply interruption risks.