Escalating conflicts, diverging allies

This week in a brief

This week, several of the fronts that opened in recent weeks escalated, while cracks emerged within the Western camp. The deadly Houthi attack on Riyadh’s airport took the war in Yemen up a level, the Ethiopian army reached the Eritrean border, and the Hormuz negotiations stalled. Meanwhile, the diesel deal between Washington and Moscow and the US sanctions on the International Criminal Court are setting the United States against its allies in Europe. In the economy, the European Union and China reached an arrangement on hybrid vehicles, and the IMF warns that the global economy’s resilience is reaching its limit. On the political front, Brazil enters the final stretch ahead of the runoff, and Pakistan is opening another domestic front.

Geopolitical Dynamics

The Trump–Putin diesel deal: Trump announced on October 9 that Russia will release 300,000 tons of diesel onto the market immediately, 500,000 tons in November and a further one million tons later, and the US Treasury authorized transactions in Russian diesel until April 2027. Zelensky called the move “a gift to Putin,” and seven senators from both parties argued that it contradicts the law banning imports of Russian oil. It appears that America’s distress over fuel prices ahead of the midterm elections is outweighing the policy of pressure on Moscow. Meanwhile, Britain called instead for tougher sanctions on Russia’s shadow fleet, even as Washington weighs easing some of the sanctions on vessels in order to bring down shipping costs.

The Miami talks on ending the war in Ukraine: On October 9, Trump’s envoys met with Ukrainian and European representatives and discussed energy, grain exports, security guarantees and reconstruction. Washington pressed Kyiv to stop striking refineries in Russia, and Trump publicly declared an “energy ceasefire,” but the Russians did not confirm it, and Kyiv reiterated that it would agree only to a mutual ceasefire on energy strikes.

The United States sanctions the International Criminal Court itself: For the first time, the sanctions target the institution and not only its officials. The court’s assets under US jurisdiction have been frozen, and Americans are barred from new transactions with it, with a 180-day transition period. Eight foreign ministers, including those of Britain, France, Germany and Japan, voiced strong opposition, and Belgium and the Netherlands asked the European Commission to consider legislation to protect European companies. The move opens another legal and diplomatic front between Washington and its allies.

The Hormuz talks stall, and Iran widens its pressure on shipping: Iran described the US response to its proposal to reopen the strait as “insufficient” and announced that Hormuz will remain closed as long as its conditions are not met. At the same time, Tehran extended its operational pressure beyond the strait itself: within 48 hours, at least five incidents were recorded in which commercial shipping was hit or harassed in the Gulf of Oman and in waters near Qatar and the UAE. Meanwhile, the UN warns that unless a mechanism allowing fertilizer shipments through Hormuz is found within weeks, the planting season in parts of Asia and Africa could once again be disrupted. The crisis around the strait is thus moving from a phase of purely diplomatic bargaining to a direct impact on trade routes, energy and food security.

China responds with drills to the Taiwanese president’s speech: In his National Day address, President Lai explained that increasing the defense budget is intended to deter war, and Beijing accused him of “pursuing independence by military means.” In response, China announced live-fire drills in five maritime zones, and on October 14, 13 sorties by Chinese aircraft were detected, 11 of which crossed the median line of the strait, which in effect serves as the maritime border between the two countries.

Security and Threats

Drone warfare reaches shipping off the coast of Bulgaria: Two commercial vessels were hit by drone strikes off the Bulgarian coast on October 13. One of the ships sank and 11 crew members were listed as missing; another vessel was hit, but its crew was rescued. It is the second attack on commercial shipping in the area within a week. Sofia refrained from formally blaming Russia, but it summoned the Russian ambassador and announced that it intends to join NATO’s counter-drone initiative by the end of the month.

The deadliest attack on Saudi Arabia in a decade: A Houthi strike on Riyadh’s international airport on October 10 killed 13 people and wounded more than 300. The airport was attacked again the following day and closed, and the Houthis declared Saudi airspace a military zone. Trump said the United States “may” join the Saudi strikes, and the Houthis threatened to hit Aramco’s oil facilities as well. At the same time, the Houthis extended their strikes to the headquarters of Saudi Aramco and to additional airports, thereby carrying the campaign beyond aviation infrastructure to the very core of Saudi Arabia’s economic infrastructure.

The Ethiopian army reaches the Eritrean border: After capturing the city of Mekelle, Ethiopian forces and their allied militias also took Adigrat and Adwa in Tigray and entered Zalambessa, on the border with Eritrea. Addis Ababa accused Eritrea of sending forces to assist the rebels in Tigray, while Asmara denied it. The UN Security Council held a closed session on the matter, without adopting a resolution. The army’s arrival at the border brings the scenario of a direct confrontation between the two countries closer.

Pakistan and Afghanistan: the Moscow talks fail: The Russian-mediated talks ended without an agreement, and on October 12 Pakistan reported that it had foiled an infiltration in the Kurram area and killed 12 militants.

Congo’s former president forms a front against the government together with the rebels: Kabila announced an opposition coalition that includes the Rwanda-backed M23 rebels, who control parts of the country’s east. The move challenges the sitting president and threatens the peace process mediated by the United States and Qatar.

Economy, Technology and Trade

The EU and China reach an arrangement on hybrid vehicles: Contrary to the initial impression when talks opened, China ultimately agreed to a quota of 350,000 Chinese-made hybrid and plug-in vehicles a year, growing by 6% annually for four years, compared with about 800,000 that were expected to reach Europe this year. In return, Beijing will maintain a fast-track licensing channel for rare earths and cut tariffs on about €4 billion of European exports. Meanwhile, the European Parliament called, by 454 votes to 86, for countermeasures to be considered if China exploits Europe’s dependence on raw materials.

The IMF: “The global economy’s resilience is reaching its limit”: The Fund forecasts global growth of 3.1% in 2026 and 3.4% in 2027, alongside global inflation of 4.7% this year. China is expected to grow by 4.5% this year and 4.0% in 2027, but the Fund warns that it is approaching a deflationary environment and urges Beijing to deploy broader fiscal stimulus. The Fund also warns that diesel shortages, rising bond yields and a possible correction in AI investment could add pressure on the financial system. Put simply: the global economy keeps growing despite the wars, energy prices and tariffs, but its capacity to absorb another shock is steadily shrinking.

Crises and Domestic Politics

The crisis in Khyber Pakhtunkhwa deepens: Pakistan’s president declared a six-month state of emergency in the province bordering Afghanistan, suspended the provincial government controlled by former Prime Minister Khan’s PTI party, and appointed a new governor identified with the rival camp. Thousands of activists and supporters were arrested, and on October 14 the PTI petitioned the Peshawar High Court against the move.

France’s budget clears a first hurdle as the protests continue: On October 13, the National Assembly rejected, by 236 votes to 149, a Socialist motion to throw out the 2027 budget. In the third week of the student protests, the authorities counted 161,500 demonstrators (compared with more than 260,000 the previous week), while the unions claimed 480,000.

Protests in India after more than 130 million names are deleted from the voter rolls: The nationwide revision removed the names of the dead, of people who had changed residence and of millions who could not be located; the opposition and youth movements argue that the process could disenfranchise legitimate citizens and are demanding the resignation of the head of the Election Commission.

“Surely goodness and mercy shall follow” (Psalm 23).

The Geopolitics Lab Team