Geopolitics Weekly analyzes emerging geopolitical trends around the world, distilling the cacophony of global events into one easy reader. It lands in the inbox of Geopolitical Monitor subscribers every week. This week’s edition has been made available to all our readers. It has been published early due to the war in Iran.
Middle East
US and Israel Launch ‘Major Combat Operation’ against Iran
What Happened
The US and Israel launched decapitation strikes targeting the Iranian leadership on February 28, dubbed ‘OPERATION EPIC FURY’ (sic) by the Pentagon, reportedly killing several senior IRGC commanders and officials in the first wave. Iran has since retaliated with a barrage of missile strikes against Israel and US military outposts across the region, notably in Bahrain, UAE, and Kuwait.
Why It Matters
This is the biggest foreign policy gambit of Trump’s presidency and there is a high likelihood of destabilizing spillover events. Some factors to consider:
History Repeating. The military operation was launched despite ‘significant progress’ being made in Oman-mediated negotiations and additional talks scheduled in the weeks ahead. This echoes the June 13 attacks, which came just days before a new round of nuclear talks was expected to commence. The element of surprise increases the odds of a successful ‘decapitation’ by catching targets outside of secure facilities engaged in daily routines. The ruse was highly effective in June, and early indications suggest it may have worked again.
Don’t Call It a War. The architects of this ‘major combat operation’ evidently do not envision a deployment of troops and instead expect Iranians to seize control amid the chaos. President Trump has been explicit on this, saying that the Iranian people’s ‘hour of freedom’ has arrived, urging them to take over their government ‘when we are finished.’ Benjamin Netanyahu struck a similar tone in his statement. But there’s a reason why past US administrations have backed up their regime change ambitions with expensive and politically fraught military deployments – the alternative doesn’t tend to work. An idealized contingency foresees regime collapse from within, and the state’s coercive apparatus gradually coming under popular control, affording the US and Israel a reliable ground-level proxy to work through. The more likely outcome, however, is an existential struggle between an armed though fractured regime and an unarmed populace. The bloody culmination of the latest protest wave in Iran represents a tragic illustration of this. Taken to its logical conclusion, the fractures multiply and harden on both sides to eventually resemble something like the Myanmar civil war.
Ordinance Concerns. Iran is a large country with no shortage of high-value targets; thus, the conflict will draw down an already depleted stock of sophisticated US munitions, possibly impacting operational readiness in other contexts. Previous Geopolitical Monitor articles have explored the inordinately high costs of Operation Rough Rider, US efforts to reduce costs in the age of asymmetric swarm warfare, and industrial and critical mineral chokepoints in defense supply chains.
Experimental Military Tactics. Warfare is evolving in real time along frontlines worldwide and this conflict will be no different. The Iranian regime has long prepared for an asymmetric conflict, boasting a ‘mosquito fleet’ of swarming fast attack boats, domestic submarines, and sea mines. Moreover, under its ‘mosaic defense’ doctrine, elements of the Iranian military are supposed to compartmentalize and act autonomously in the event of a decapitation strike. Suddenly embroiled in this long-planned-for existential struggle, it’s now or never to make good on threats to shut down the Strait of Hormuz and/or contest the US Navy at sea. Should these attacks actually occur, the US military stands to gain practical experience countering the swarm tactics that are now dominating modern warfare. Should some of these attacks actually succeed, it would be politically embarrassing for President Trump and likely herald further escalations.
Experimental Geopolitics. Out of the gates, the war is remarkable in that no significant efforts are being made to legitimize it: the objectives are unclear; there is little domestic support for it in the United States; it is not backed by any major international organization like the UN; there is no obvious legal justification; and allies are not exactly lining up to stand behind Washington and Israel. The brazenness of it all naturally lends itself to regional and global pushback, with states potentially more willing to suffer the consequences of bucking Washington’s line. We were already seeing some interesting developments along these lines even before the war broke out in China’s willingness to sell hypersonic anti-ship missiles and drones to Tehran.
Only Safety in Nuclear Weapons. The attacks represent a turning point in nuclear nonproliferation, a decisive shift away from the carrot approach of persuasive compliance via technology sharing and assistance under the Non-proliferation Treaty (NPT) and toward coercive enforcement. The ultimate takeaway is that only nuclear weapons can provide regime security, and this lesson will be ringing in the ears of officialdom in non-nuclear states for decades to come.
Black Monday for Energy Markets? Iran was producing around 3.3 million barrels per day (bpd) and 1.3 million bpd of condensate before the war broke out, but the real risk comes from a potential disruption of energy supply moving through the Strait of Hormuz, which saw around 20 million bpd of oil traverse its waters daily in 2024. One estimate from Oxford Economics projects a price level of $115 per barrel should Iran actually succeed in closing the Strait to maritime traffic.
Asia
Two Wars, One Week: Open War Erupts between Pakistan and Afghanistan
What Happened
Pakistan has declared ‘open war’ on Afghanistan, launching a wave of strikes across the country targeting military facilities and Taliban facilities in Kabul and Kandahar. The offensive perpetuates a cycle of escalation over the past few weeks, which has seen a massive suicide bombing in Islamabad (attributed to Afghanistan-based militants), exchanges of fire between the two militaries along the border, and surgical airstrikes from the Pakistani military.
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Why It Matters
Strange Bedfellows. The relationship between the Pakistan authorities and Pashtun militancy in Afghanistan is a cautionary tale in geopolitical blowback. Once viewed as an avenue of ‘strategic depth’ against India, Islamabad has at various times supported and nurtured the Afghan Taliban and Tehreek-e-Taliban Pakistan (TTP) despite the fact that these groups adhere to a trans-national view of Pashtun nationalism that would take a large chunk out of the Pakistani state if ever realized. Now the chickens have come home to roost, and ironically, it’s the TTP that has allegedly become a vector of strategic depth for India against Pakistan.
New World Disorder. Another inter-state war has broken out, illustrating how the reputational and economic costs of open war are dropping for lack of a mechanism to impose said costs (engaged major powers or a functioning security council, for example). The natural result is that inter-state war is becoming more and more common, as seen in Thailand-Cambodia, Israel-Iran, Russia-Ukraine, and India-Pakistan, and backed by the data.
Mounting Regional Risks. With Iran there is the possibility of two wars unfolding in bordering states in a volatile region. For some sense of the stakes, see this (very outdated) map illustrating the ethnic breakdown of the region. The border-straddling Pashtun areas form the core of the conflict currently playing out between Kabul and Islamabad. But the border-straddling Baluch areas to the southwest could also play a factor. On the Pakistan side, the area is home to an ongoing insurgency targeting the state and Belt and Road interests, and on the Iranian side a nationalist movement that has figured in past mobilizations and that some argue is now being instrumentalized by Israel as a weapon against the regime. The flare-up of attacks and protests across Baloch regions in 2024 provides a template for what it may look like as security assets are shifted away and local governance is disrupted by war. This represents just one of many spillover risks across the region.
China Keeps Turning the Economic Screws on Japan
What Happened
On February 24, China’s Ministry of Commerce (MOFCOM) placed 40 Japanese entities on export control lists, effectively restricting the export of dual-use technologies with military applications. Targeted enterprises include the Mitsubishi, IHI, and NEC affiliates (the complete list can be found here). Another 20 entities were placed on a watch list requiring stricter compliance measures.
Why It Matters
The decision, justified as an effort to curb Japan’s attempts at ‘militarization and nuclearization,’ represents the first time that Japanese companies have featured on China’s export control list since it debuted in 2025. The list provides a legal rationale for restricting any and all exports to entities that are determined to be acting contrary to China’s interests.
These latest restrictions fall under a broader pressure campaign targeting Prime Minister Takaichi for her support of Taiwan. It has manifested elsewhere in restrictions on rare earth exports and travel warnings that have sapped tourist flows and hurt the Japanese economy.
There is an element of uncertainty here because Takaichi remains an unknown quantity. The newly anointed avatar of Japanese politics has generally favored a hard line policy toward China, so hostility from Beijing won’t necessarily result in the same eventual détente equilibrium of past cycles. Another issue to watch will be the degree to which Washington allows its closest ally in the Indo Pacific to be singled out for economic coercion, especially when it was very much a joint project – the defense of Taiwan – that got Takaichi into trouble in the first place.
Europe
Iceland Moves Forward Referendum on EU Membership
What Happened
Iceland Prime Minister Kristrun Frostadottir has announced that the island will hold a referendum on restarting EU ascension talks ‘in the coming months.’ The vote was originally scheduled for spring 2027.
Why It Matters
The reasoning behind the decision is unambiguous: to expedite the ascension process in a geopolitical context fundamentally changed by President Donald Trump’s threats to annex Greenland. Much like its continental neighbor to the west, Iceland occupies a highly strategic position as lynchpin of the GIUK Gap. But what’s really striking is the fact that Iceland is already a part of the EU single market, the Schengen zone, and European Free Trade Association. In other words, Reykjavik already reaps much of the economic reward of close association with the EU. It follows that security is the overriding concern here, fueled by changing grassroots perceptions on the reliability of NATO. This is about diversifying security relationships, and it could take Iceland all the way to Brussels.
This Week in Drone Warfare: Ukraine Races to Cover Frontline with 4000 km of Anti-drone Netting
What Happened
Ukraine Defense Minister Mykhailo Fedorov has revealed that his country plans to cover some 4,000 kilometers of roads with anti-drone netting by the end of the year, costing an estimated $37 million. The netting will be used to protect supply lines from increasingly deeper strikes from Russian drones.
Why It Matters
The alpha is the omega on anti-drone netting. What began as an intuitive, low-tech solution born of necessity is now regarded as the most cost-effective defense available, with more expensive tools like signal jamming increasingly sidestepped by AI and autonomous guidance. Ukraine continues to serve as a morbid laboratory for drone warfare, where new techniques and platforms are tested and perfected before their adoption elsewhere.
Americas
January US Producer Prices Surprise on the Upside at 0.8%
What Happened
US Core PPI came in at 0.8% in January, up 0.2% from the month before and well in excess of the consensus estimate of 0.3%. The reading pushes the year-on-year rate to 3.6%.
Why It Matters
Put charitably, the PPI reflects sustained upward price pressure in the United States. The numbers ripple across several fronts:
Stagflation Risks. Fourth quarter GDP growth disappointed (stag) and now we see new evidence of price growth (flation). Analysts coined the term ‘stagflation lite’ in the second half of 2025. These new numbers may herald the return of the OG.
Tariff Pressures. President Trump’s tariff policy is widely believed to be inflationary. These latest numbers will increase political pressure on the president to reverse course, with second-order consequences for US foreign policy. The recent Supreme Court ruling against the IEEPA tariffs provides some handy political cover to do just that.
Iran War. Gasoline prices have been a rare bright spot in the US cost-of-living outlook. If the conflict drags on or cascades into other states, inflation will lose its anchor, unleashing some eye-watering readings in coming months.