A global adaptation to a new strategic environment will define 2026, driven by the White House’s approach to international relations. Though Washington will continue pursuing de-escalation in select conflict zones, the year ahead will be marked by persistent geopolitical frictions, intensifying hybrid competition, and acute humanitarian pressures.
In the Russia-Ukraine conflict, diplomatic efforts will persist and gain some traction, raising the possibility of a ceasefire mediated by the U.S., with potential involvement from Türkiye, the Gulf states, or India. The likelihood of a durable peace agreement remains low, however, as both sides will intensify attacks on energy and critical infrastructure, and key differences related to territorial control and other sensitive issues remain unsettled.
In the Middle East, the fragile ceasefire in Gaza will largely hold but remains vulnerable to tactical-level disruptions as regional tensions run high. Israel is likely to maintain or expand the scope of its territorial operations in Syria, Lebanon, and West Bank. U.S. diplomatic pressure likely will heighten tensions between Hezbollah and the Lebanese government, while both the U.S. and European Union are likely to increase economic pressure on Iran.
In the Indo-Pacific, an enduring U.S.–China trade truce will keep the region relatively stable, though China will continue to leverage its market power to pressure regional states supporting Taiwan. Increased arms sales from the U.S. to Taiwan could trigger a more aggressive military posture by China. The U.S. will continue to pursue a trade deal with India and could open dialogue with North Korea as it seeks to gain influence and allies in the region.
Humanitarian conditions in Sudan and the Democratic Republic of the Congo will most likely continue to deteriorate. In the Western Hemisphere, U.S.–Venezuelan tensions are expected to remain elevated following a sharp escalation in 2025. The United States will likely extend the deployment of significant military assets off Venezuela’s coast and expand the scope and intensity of ongoing counternarcotics and security operations. The likelihood of a negotiated departure by President Nicolás Maduro remains low. Trump will likely authorize covert action to topple Maduro, and potential direct military strikes inside Venezuelan territory will remain elevated, despite possible constraining pressure from congressional oversight. Youth-driven protest movements will continue to pose destabilization risks as mounting pressure leads to destabilizing confrontations with governments.
Global trade flows are expected to stabilize relative to 2025 as new norms with tariffs and other forms of restrictions set in. Although the White House will likely target select countries and sectors, overall restrictions are expected to decrease. A net lifting of tariffs is likely, but sanctions will remain, particularly as U.S.–China tensions persist over critical minerals and advanced technology.
At the same time, global energy connectivity will be reshaped by accelerating electrification and rising electricity demand driven by AI development. Renewable energy will expand rapidly, while oil markets remain oversupplied and gas markets tighten in the U.S. and Europe.
Editor’s Note: This forecast presentation has been edited to include more information from the full report regarding developments in Venezuela. (Jan. 5, 2026)
To access the full 2026 Annual Forecast, register here.
This week, the conflict in Iran intensified as the U.S. bombed military facilities on Iran’s Kharg Island and Israel bombed key Iranian energy facilities, with Iran responding...
This week, the U.S. and Israel continued their military campaigns against Iran and Lebanon, while Tehran vowed to block oil exports from the region, leading to worldwide repercussions in...
This week, the United States and Israel launched air- and naval-based attacks against Iran, killing Supreme Leader Ayatollah Ali Khamenei. Iran retaliated with strikes against neighboring Gulf states and by closing the Strait of Hormuz. ...
This week, the United States conducted a major military operation against Venezuela resulting in the capture of President Nicolas Maduro...
