Monthly Geopolitical Assessment May 2026

Monthly Geopolitical Assessment: May 2026

Product Serial: A-2026-05-01a

TLP:CLEAR

Standing Intelligence Requirements

Geopolitical and Physical

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Key Findings

• Measured military responses to setbacks in U.S.-Iran talks signal that both sides are likely reluctant to return to armed conflict and instead prefer to utilize economic coercion to increase ceasefire pressure. The United States and Iran will likely resume talks, but escalatory risks remain—especially as both countries maintain dual blockades of the Strait of Hormuz (SoH). Since the terms of the ceasefire require the SoH to remain closed, all of the negative economic consequences seen during the period of all-out war in Iran will very likely worsen.
• The United Arab Emirates (UAE)’s decision to leave OPEC very likely signals its intent to increase oil production once the SoH is reopened and reflects concern that the war in Iran has quickened the transition away from fossil fuels. Few other states have the UAE’s competitive advantages, and the UAE is very likely moving to maximize output while oil demand remains. Other states are likely to make this decision as well, which is expected to lead to a temporary increase in fossil fuel production before demand slumps.
• The chaos surrounding Peru’s elections has been the norm in recent regional elections. The losing side will very likely claim electoral fraud, increasing the risk of social unrest. Similar outcomes are likely in the major upcoming elections in Colombia and Brazil.
• U.S. President Donald Trump and Chinese President Xi Jinping are scheduled to attend a high-profile summit in mid-May 2026. If the war in Iran is not settled by that time but does not delay their meeting again, Trump is likely to be on weaker footing for the summit; Xi will likely pressure the United States to make a public commitment to downgrading its ties with Taiwan. However, overall U.S.-China tensions are likely to improve throughout 2026.
• A definitive resolution to the U.S. blockade of Cuba remains unlikely while the Trump administration remains preoccupied with Iran.
• Growing Australia–Japan defense ties are likely a model of how U.S. allies will develop alternative security pacts.