This week, U.S. President Donald Trump held meetings with Ukrainian President Volodymyr Zelenskyy and key European leaders to advance a peace deal with Russia, while Russian attacks continued across Ukraine. In the Indo-Pacific, Chinese Foreign Minister Wang Yi travelled to India for trade talks as bilateral relations thawed, while Trump threatened to impose tariffs on semiconductor imports within the coming week. In the Middle East, Israeli forces captured the outskirts of Gaza City as the campaign to fully occupy the city began, while Iran held its first naval drills since its June war with Israel.
Weekly Forecast Monitor: Aug. 22, 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 Trump hosted Zelenskyy and seven European leaders at the White House on Aug. 18. Following the meeting, Trump said the U.S. would coordinate European-led security guarantees for Ukraine and ruled out U.S. troop participation in a potential multinational ground peacekeeping force. However, he said the U.S. may provide air support capabilities in a postconflict scenario. U.S. and European defense officials have begun drafting collective security options that would operate outside of the traditional NATO framework. Trump said he wants Russia and Ukraine to hold direct bilateral talks and added he would step back from involvement in the process. Should a summit take place, Trump said he intends to arrange a U.S./Russia/Ukraine meeting. Meanwhile, Russia launched nearly 600 drones against Ukrainian cities in an overnight attack on Aug. 21.
2 Middle East
Summary
The Middle East trended toward military escalation as the Israel Defense Forces initiated its campaign to occupy Gaza City. The IDF began seizing territory around the city’s outskirts, as Israeli Prime Minister Benjamin Netanyahu announced that he had ordered the IDF to “shorten the timelines” to achieve the full occupation of the city. The Israeli government approved the E1 settlement expansion, which aims to deny the possibility of a Palestinian state by severing East Jerusalem from the rest of the West Bank. Iran conducted its first military drills since its recent war with Israel, with naval forces conducting live fire drills against targets in the Gulf of Oman and the Indian Ocean. Meanwhile, Syrian Foreign Affairs Minister Asaad Al-Shaibani met with Israeli Strategic Affairs Minister Ron Dermer in Paris on Aug. 21 to discuss the de-escalation of Israeli military intervention inside Syrian territory.
3 U.S./China/Indo-Pacific
Summary
The Indo-Pacific trended toward diplomatic de-escalation as trade talks between India and China resulted in the resumption of direct flights between the countries and of Chinese exports of rare earths to India. Trump claimed that Chinese President Xi Jinping assured him China would not invade Taiwan during Trump’s term, with China subsequently warning against outside interference in China’s “internal” Taiwan issue. Trump said he would set tariffs on steel and semiconductors, warning that tariffs on microchips could reach 300% in an attempt to reshore the industry. Taiwanese Premier Cho Jung-tai announced that the island would raise its defense budget to over 3% of its GDP for 2026.
4 Other Hotspots
United States
Texas Republicans approved a new congressional map aimed at reversing five Democrat-held U.S. House seats in the 2026 midterms. The vote came after the return of Democratic lawmakers who had previously left the state to hold up the passage of the measure by denying a quorum of the chamber. California Gov. Gavin Newsom signed two redistricting bills in response, which will likely expand the number of U.S. House seats held by Democrats. Forecast – political destabilization
Venezuela
President Nicolas Maduro has pledged to mobilize 4.5 million militia fighters following threats from the U.S. that raised the reward for his arrest to $50 million and its deployment of warships to the Caribbean in light of wider counternarcotics operations. Forecast – military escalation scenario
Democratic Republic of the Congo
The M23 rebel group did not appear at the latest round of peace talks with the government in Qatar, accusing the government of breaking a previously agreed-upon ceasefire last month. Forecast – security destabilization scenario
The Global Connectivity Tracker examines the impact of geopolitical dynamics on key themes like trade, technology, and energy/climate.
1
United States
Renewable Energy
What Happened
Installed capacity for renewable energy in the United States continued to rise in the first half of 2025 but at a significantly reduced rate than the 12-month period ending in June 2024. New solar, wind, and battery storage capacity rose 7%, as measured from June 2024 to June 2025, marking the slowest rate of expansion in more than a decade.
Significance/Outlook
Under President Donald Trump, federal policies have discouraged further development of solar and wind generation. The slowing growth of those sectors reflects increasing regulatory hurdles and the withdrawal of federal subsidies, with solar, which had seen an average growth of 27% annually since 2020, up by just 10% during the period studied and wind climbing just 1.8%, the slowest growth rate in 15 years. The slowdown in renewable energy growth was most pronounced in California and Texas, states that lead the country in renewable energy production. Battery storage systems, which help even out variable output from renewables, posted a 22% increase in installed capacity. Those systems remain eligible for federal support.
2
Algeria/United States
Natural Gas
This deal is significant for Algeria to unlock unconventional energy resources such as shale gas. The partnership could provide Algeria a chance to boost its energy sector, revenue, and status as an energy producer. Successful shale gas development in Algeria will help Exxon and Chevron expand their global reach, especially in a high-growth region.
What Happened
Exxon and Chevron are close to signing agreements with Algeria to facilitate exploration and investment in the country’s shale gas resources.
Significance/Outlook
This step will pave the way for Algeria to explore and invest in shale gas resources and expand its gas pipeline network and LNG export capabilities, helping Algeria increase production and boost exports while maintaining its position as a major gas supplier to Europe. This deal will assist in the replacement of natural gas inflows from Russia to Europe and will help supply rising European demand. The investment also could help address Algeria’s rising energy consumption.
3
United Kingdom
Solar Energy
Solar power has prevented the emission of about 6.61 million metric tons of carbon dioxide equivalent in the U.K. and prevented the need for $814 million worth of natural gas imports so far in 2025. It is part of the U.K.'s larger plan to decarbonize its energy sector and establish itself as a world leader in renewable energy. Its goal is to achieve net zero emissions of greenhouse gases by 2050.
What Happened
U.K. solar photovoltaic (PV) installations produced 30% more electricity in 2025 than in 2024, a University of Sheffield study found.
Significance/Outlook
High solar PV generation in 2025 was possible due to sunny weather and record installation of capacity. Houses powered by solar PV offer both environmental and economic benefits: reducing carbon footprint, lessening impact on the environment, lowering electricity bills, and reducing reliance on gas imports. The U.K.’s energy security and progress toward its climate goals are both enhanced by the increase of solar power generation capacity.
4
Iran
Oil
What Happened
Almost 70% of Iranian oil tankers switched off or tampered with tracking systems in the first half of 2025, disguising their movements around the Persian Gulf, Nikkei reported.
Significance/Outlook
The report estimated that around 90% of Iran’s oil bound for China is disguised as shipments to Malaysia. These flows provide Tehran with critical revenue to sustain its economy and nuclear ambitions, but they also leave Iran vulnerable to sharper U.S. sanctions enforcement. For China, reliance on disguised Iranian supplies risks entanglement in escalating disputes with Washington, but stricter enforcement could cut off at least 500,000 barrels per day (bpd) from Iran, triggering sharp price spikes and heightened volatility.
5
China
Oil
What Happened
China’s refineries processed 14.85 million bpd of crude oil, a nearly 9% increase over the same period in 2024.
Significance/Outlook
Even with increased processing, combined imports and domestic output still exceeded consumption, resulting in a 530,000 bpd surplus in July, down from the 1.42 million bpd surplus in June. Since March, surpluses averaging nearly 1 million bpd suggest refiners are building inventories. At the same time, China’s steady crude oil imports in recent months have supported global demand. A future shift to drawing down reserves, however, could slow import growth and put downward pressure on prices.