Weekly Forecast Monitor: Oct. 17, 2025

The Russia/Ukraine war trended toward military escalation as Trump and Zelenskyy discussed the possibility of the U.S. providing Ukraine with Tomahawk cruise missiles. They also talked about the use of frozen Russian assets to aid Ukraine and additional U.S./allied sanctions against Russia. Trump claimed Indian Prime Minister Narendra Modi said India would no longer import Russian oil, and Bessent pressured his Japanese counterparts to adapt a similar policy. Russia and Ukraine intensified assaults targeting energy infrastructure amid reports that the U.S. is providing Ukraine with targeting intelligence on Russian oil facilities. Trump’s statements indicating he was “optimistic” about the success of peace efforts signaled a renewed effort to achieve a peace deal between Moscow and Kyiv, following his administration’s successful brokering of a ceasefire agreement in Gaza. Trump said he will meet with Russian President Vladimir Putin in about two weeks in Budapest to discuss peace efforts in Ukraine.

The Middle East trended toward diplomatic de-escalation as Israel and Hamas began to implement the Gaza peace plan. The Israel Defense Forces (IDF) withdrew to the designated demarcation line inside Gaza, completing the first of a three-phase withdrawal. Hamas released all 20 living Israeli hostages held in Gaza and began to return the bodies of dead hostages. Israel kept the Rafah border crossing closed and continued to limit the entry of humanitarian aid, claiming Hamas has delayed the return of hostages’ bodies. Hamas, which has not committed to disarmament and has reasserted control of territory inside Gaza following the IDF withdrawal, began a violent crackdown on those it has labeled “collaborators” and “criminals.” Trump, commenting on the extrajudicial killings, said Hamas needed time to “solve problems” and that its disarmament would be carried out “violently” if necessary. Meanwhile, in Moscow, interim Syrian President Ahmed al-Sharaa told Russian President Vladimir Putin that Syria would honor defense agreements made under the government of deposed President Bashar al-Assad, likely clearing the way for Russia to maintain its military presence in Syria.

The Indo-Pacific trended toward hybrid escalation as Trump threatened to impose additional 100% tariffs on Chinese imports and halt U.S. purchases of Chinese cooking oil in retaliation for China’s latest round of export curbs on rare earth elements. Bessent confirmed Trump will meet Chinese President Xi Jinping in South Korea later this month. Trump told reporters that India had agreed to halt its purchases of Russian oil. China imposed sanctions on five subsidiaries of South Korean shipbuilder Hanwha Ocean and has started collecting port fees from U.S.-affiliated vessels. The U.S. Senate approved the 2026 National Defense Authorization Act, which allocates $1 billion in aid for Taiwan and encourages it to take an active part in this year’s Rim of the Pacific military drills.

United States

A federal judge in California has ordered the Trump administration to halt layoffs of federal workers at more than 30 agencies. The White House is likely to appeal the decision. Forecast – economic stabilization scenario

United States/Venezuela

Trump confirmed he had authorized the CIA to carry out covert operations in Venezuela. This follows reports of a fifth confirmed U.S. military strike against a vessel suspected of smuggling drugs in the Caribbean and as Trump further speculated on future ground operations in Venezuela. Forecast – military escalation scenario

Pakistan/Afghanistan

Both countries agreed to a temporary ceasefire following border clashes involving ground fighting and airstrikes that killed 12 civilians and wounded over 100. Forecast – diplomatic de-escalation scenario

United States/Argentina

Trump threatened to cut off aid to Argentina if current President Javier Milei, whom Trump has publicly endorsed, does not win reelection. Forecast – hybrid escalation scenario

Madagascar

The African Union has suspended Madagascar following a coup that ousted President Andry Rajoelina. Col. Michael Randrianirina, who led the coup, has been sworn in as interim president. Forecast – political destabilization scenario

The Global Connectivity Tracker examines the impact of geopolitical dynamics on key themes like trade, technology, and energy/climate.

Spain/Solar

Low prices for power generated by solar energy and increased curtailments threaten the growth of the sector in Spain as well as the country’s energy transition and ability to meet climate targets, industry group UNEF stated. This year, solar power producers in Spain faced 693 hours of negative or zero power prices, which occurs when supply exceeds demand and producers must either pay to offload power or stop production. The extensive development of renewable power and a lack of storage capacity in Spain and elsewhere in Europe has worsened demand-supply mismatches.

Forecast – Energy Disruption Scenario: Zero or negative solar power prices reduce renewable energy project profitability, limiting investment and adoption and indicating grid inefficiencies such congestion or poor storage capacity.

India/Russia/Oil

On Wednesday, Trump said Modi assured him India will stop buying Russian oil, though no timeline was given. Trump criticized the purchases for funding Moscow’s war in Ukraine, while India’s Foreign Ministry said import decisions are guided by consumer protection and supply stability. The exchange follows recent 50% tariff hikes on Indian goods by the U.S., a factor that may have influenced New Delhi’s decision. For the time being, India remains a major buyer of Russian oil, with imports of about 1.7 million barrels per day.

Forecast – Energy disruption scenario: U.S.-India friction over Russian oil is likely to persist as New Delhi balances domestic energy security and economic interests with Washington’s push to curb Russian oil revenues.

U.S./Russia/Ukraine/Energy

The U.S. has reportedly shared intelligence with Ukraine allowing it to carry out long-range drone strikes on Russian energy infrastructure, unidentified sources with both governments have said. U.S. intelligence helped Ukraine in locating vulnerabilities within Russian energy facilities, including oil refineries and natural gas processing plants. U.S. intelligence has allegedly helped Ukrainian drones avoid Russian air defenses.

Forecast – Energy Disruption Scenario: Drone strikes have damaged key Russian refineries, resulting in decreased output, gasoline shortages, and a decline in oil exports and revenue.