Weekly Forecast Monitor: Dec. 5, 2025

The Russia/Ukraine war trended toward diplomatic de-escalation as a U.S. delegation led by Special Envoy Steve Witkoff and Trump son-in-law Jared Kushner discussed U.S. peace efforts with Russian President Vladimir Putin in Moscow on Dec. 2 and met with a senior Ukrainian delegation in Miami on Dec. 4. Meanwhile, Putin claimed that Russian forces had fully captured the Ukrainian city of Pokrovsk. Ukrainian drones struck at least two Russian-flagged “shadow fleet” vessels in Turkey’s Black Sea economic exclusion zone. NATO said it is considering adopting a more aggressive posture to deter Russian sabotage in Europe. Putin traveled to India to discuss defense and economic cooperation with Indian Prime Minister Narendra Modi.

The Middle East trended toward diplomatic de-escalation as Hamas returned the remains of one of its two remaining hostages to Israel on Dec. 3. Lebanese President Joseph Aoun announced that Israeli and Lebanese delegations will conduct a second round of direct deconfliction talks on Dec. 19, following an initial round of talks on Dec. 3 that he described as “positive.” Israeli Prime Minister Benjamin Netanyahu said he wanted to establish a buffer zone against Syrian security forces in the Golan Heights and that it was “possible” to reach a formal nonaggression agreement with Syria. The comments followed a Nov. 28 Israeli ground raid targeting reported militants in Syria that killed at least 13 people.

The Indo-Pacific remained at the status quo scenario in the past two weeks. China issued its first round of rare earth element export licenses in line with an agreement signed with the United States in October. Trump asked Japanese Prime Minister Sanae Takaichi not to escalate tensions with Beijing while halting plans to sanction the Chinese Ministry of State Security. China has deployed upwards of 100 ships into the East and South China Seas, expressing anger over Japan’s continued reluctance to retract comments over Taiwan. Taiwanese President Lai Ching-te announced a special $40 billion budget for increased weapons purchases as China is reportedly increasing the number of military bases on its eastern coast. French President Emmanuel Macron and Chinese President Xi Jinping agreed to deepen cooperation on trade and resolving the Ukraine conflict. Chinese tech companies have been training their AI models abroad in order to use advanced chips from Nvidia, effectively circumventing U.S. tech export restrictions.

United States

The Department of Defense is facing heavy bipartisan scrutiny from Congress following a Washington Post report providing details on recent U.S. strikes against alleged drug-smuggling vessels in the Caribbean, which suggest an order to “kill everybody” resulted in a secondary strike against survivors. Forecast – political destabilization scenario

Sudan

The paramilitary Rapid Support Forces said it gained full control of a transport hub in Babanusa, in the oil-producing state of West Kordofan, building on momentum after seizing al-Fasher, despite U.S.-led ceasefire efforts. Forecast – security destabilization scenario

Brazil

The Federal Police arrested former President Jair Bolsonaro after the chief justice overseeing his case suspected he was trying to flee before beginning a 27-year prison sentence for inciting an attempted coup. Forecast – political destabilization scenario

United States/Renewables

The Trump administration has renamed the National Renewable Energy Laboratory as the National Laboratory of the Rockies. The administration’s shift in U.S. energy policy toward an emphasis on fossil fuels and reduction in federal assistance for solar and wind energy will result in budget cuts and cancellations for clean energy projects.

Forecast – climate disruption scenario: This policy shift will dramatically slow sustainable energy projects and innovation, which, in turn, could create uncertainty and disruption of clean energy businesses that rely on federal policy and funding. This could affect both domestic and global clean energy transitions and climate change targets.

Italy/EU/Hydrogen/Carbon Dioxide

The EU has approved funding for Italian gas grid operator Snam’s SoutH2 hydrogen pipeline and Ravenna carbon dioxide storage projects in Italy. The SoutH2 Corridor pipeline will link Algeria, Italy, Austria, and Germany, and the Ravenna project is a carbon capture and storage hub to be constructed in a joint venture with Italian energy company Eni.

Forecast – energy enhancement scenario: The projects enhance the EU’s clean energy transition by establishing critical infrastructure for the supply of renewable hydrogen and enabling large-scale industrial decarbonization, respectively.

United States/Japan/Trade

Nine Japanese companies have sued the U.S. government in the U.S. International Trade Court, demanding full refunds of any costs incurred because of U.S. tariffs should they be found to be unconstitutional. This comes as the U.S. Supreme Court is hearing a case against tariffs invoked under the International Emergency Economic Powers Act, which became the foundation of the Trump administration’s “Liberation Day” tariff impositions. Several U.S. companies, including Costco Wholesale, also sued the administration over tariffs.

Forecast – trade disruption scenario: If the Supreme Court judges the tariffs to be unconstitutional, the .U.S. government may have to reimburse many of its trading partners with accrued interest, at a potential cost of billions of dollars.

OPEC+/Oil

OPEC+ has introduced a new plan requiring all member states to undergo yearly independent assessments of their true oil production capacity starting in 2026. This marks a major shift aimed at reducing long-standing disputes over inflated or outdated capacity claims, which have complicated quota-setting for years. The audit mechanism is intended to create more credible baselines and stabilize future production agreements.

Forecast – energy disruption scenario: Annual capacity audits may shift internal OPEC+ power dynamics, benefiting producers with strong investment levels while pressuring states with declining capacity. Greater transparency could enhance market stability, but it may also reveal internal disparities that complicate coordination going forward.