This week, Israel initiated its full ground invasion of Gaza City, while the United Arab Emirates and other Arab states warned they may reconsider their diplomatic ties with Israel. In the Indo-Pacific, the U.S. and China agreed on a framework deal regarding the sale of Chinese social media app TikTok, extending the sale deadline, while China ordered its companies to stop buying microchips from U.S. chipmaker Nvidia. In the Russia/Ukraine conflict, U.S. President Donald Trump pressured European nations to suspend all energy imports from Russia, while Polish defense officials announced a joint cooperation initiative with Ukraine on countering drone attacks following last week’s incursion by Russian drones into Polish airspace. In the U.S., the Federal Reserve announced it would be cutting interest rates, with more cuts expected before the end of the year.
Weekly Forecast Monitor: Sept. 19, 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 Ukrainian President Volodymyr Zelenskyy reported that Ukrainian forces had advanced in the Sumy region near the Russian border and that Russia was preparing for two major offensives this fall. This follows previous reporting that Russian President Vladimir Putin intends to seize the entirety of the Donbas region by the end of 2025. Zelenskyy also announced that Ukraine is expecting $3.5 billion in funds from European allies to purchase weapons from the United States. The EU postponed its 19th sanctions package against Russia without issuing a public explanation. The postponement follows recent calls from Trump for European nations to cease all purchase of Russian liquefied natural gas and instead strike a deal with the U.S. for their energy needs. Ukraine conducted numerous attacks against Russian energy infrastructure and other targets related to Russia’s war effort across Russian territory. Following the recent incursion of Russian drones into Polish airspace, Polish defense officials announced plans for a joint drone “operational group” with Ukraine.
2 Middle East
Summary
The Middle East trended toward military escalation as Israel initiated its full ground invasion of Gaza City. Israeli defense officials estimate that 2,000 to 3,000 Hamas fighters remain in Gaza City and that the operation could take several months. The UAE has warned that annexation of the West Bank could cause it to downgrade its diplomatic ties with Israel, and Qatar is pursuing legal action against Israel with the International Criminal Court following its recent attack in Doha. European Commission Vice President Kaja Kallas said Iran had taken no credible steps to ward off impending snapback sanctions and that the window for a diplomatic solution was “closing really fast.” Separately, Kallas proposed suspending a $6.87 billion trade deal between the EU and Israel, in addition to sanctions against Israeli ministers and West Bank Israeli settlers. Meanwhile, U.S. Secretary of State Marco Rubio said the U.S. and Qatar were on the verge of finalizing an “enhanced” defense agreement. Syrian President Ahmed al-Sharaa said U.S.-mediated security talks between Syria and Israel could produce results within “days.”
3 U.S./China/Indo-Pacific
Summary
The Indo-Pacific trended toward diplomatic de-escalation as U.S. Treasury Secretary Scott Bessent met with Chinese Vice Premier He Lifeng in Madrid, where they agreed on a framework deal on the sale of TikTok and the U.S. promised not to impose tariffs on China related to Russian oil purchases. Chinese authorities have ordered Chinese companies to stop buying microchips from Nvidia after they found it had breached Chinese antitrust laws. China accused the Philippines of illegally entering the disputed Scarborough Shoal, with a coast guard vessel clash ensuing. Trump called Indian Prime Minister Narendra Modi to congratulate him on his 75th birthday, with Modi hailing the call as a positive development.
4 Other Hotspots
United States
Federal Reserve Chairman Jerome Powell announced the Fed would be cutting interest rates by 0.25% to the 4-4.25% range following the risk of rising unemployment, with Powell suggesting more cuts would follow in November and December. Forecast – economic destabilization scenario
United States/Venezuela
Trump said the U.S. military carried out a second strike against an alleged Venezuelan drug cartel vessel heading to the United States. Legal experts have questioned the legality of these strikes. Forecast – military escalation scenario
5 Global Connectivity
The Global Connectivity Tracker examines the impact of geopolitical dynamics on key themes like trade, technology, and energy/climate.
Ethiopia/Egypt/Hydropower
Ethiopian Prime Minister Abiy Ahmed officially opened Grand Ethiopian Renaissance Dam, a signature hydroelectric project on an upper tributary of the Nile River. Along with the official opening ceremonies Sept. 9 for the $5 billion project, the dam’s electric generation station reached its full capacity of 5,150 megawatts, making it one of the highest generating hydroelectric dams in the world. Tensions with lower riparian countries, especially Egypt, which is concerned about water flow in times of drought, could be ameliorated by the relatively cheap electricity it produces. Forecast – Energy enhancement scenario: Ethiopia has begun to electrify rural areas that previously did not have access to reliable electricity and hopes to use the dam’s output to power its nascent cryptocurrency industry.
India/Ukraine/Oil
Ukraine will restrict diesel imports from India starting Oct. 1 over concerns the fuel may be refined from Russian crude, which makes up about one-third of India’s oil imports. Indian diesel accounted for 18% of Ukraine’s August imports, but Kyiv is now testing shipments for Russian-origin components. The move reflects Ukraine’s efforts to avoid indirect reliance on Russian energy amid wartime fuel shortages. It also aligns with U.S. pressure on India and China to curb Russian oil trade, with Trump urging G7 partners to impose tariffs on them. Despite this, India plans to increase Russian crude imports in September by an estimated 150,000 to 300,000 barrels per day, a 10-20% rise from August levels, drawn by wider discounts and continued strategic energy ties with Moscow. Forecast – Energy disruption scenario: If other U.S. partners follow Ukraine’s lead, India may face growing trade friction over refined products.
Australia/United States/Critical Minerals
More than 20 Australian critical minerals companies will visit the United States to meet with Trump administration officials and discuss potential partnerships. Australia is working to position itself as a key supplier to U.S. and Western allies and develop an alternative supply chain to ones centered on China, while the U.S. is getting ready to deploy funding to support the high-tech, defense and clean energy sectors. Forecast – Critical Minerals Enhancement Scenario: This partnership could secure and sustain clean energy and defense supply chains, boost economic growth through job creation and investment, and combine Australia’s geology and critical minerals expertise with U.S. market and technology advantages.