Politics

Executive summary

Risk has risen that Iran will attempt to restrict traffic through the Strait of Hormuz in the coming weeks after suspending talks, threatening a blockade, and exchanging strikes with the United States while Washington sanctioned the Persian Gulf Strait Authority. Even a short disruption would likely double global crude prices and propagate fertiliser and food shocks, creating systemic macro‑financial stress well beyond the Middle East. In parallel, AUKUS’s decision to field interoperable uncrewed undersea vehicles by 2027 signals a durable shift to autonomous undersea warfare aimed at constraining China and hardening allied seabed infrastructure. The EU is reframing Western Balkans enlargement as a geostrategic tool to counter Russian and Chinese influence, positioning front‑runners like Albania for compressed timelines. In the Americas, U.S. terrorist designations of Brazil’s CV and PCC extend sanctions into allied domestic politics, elevating reputational and compliance risk ahead of Brazil’s October 2026 vote.