🟩 Iran drought warning, rebels agree to Sudan ceasefire, Trump tariffs threatened || Global Risks Weekly Roundup #45/2025
Executive summary
Top items:
Geopolitics: Iran’s President warned that the capital Tehran may need to be evacuated within the next few months if severe water shortages don’t ease. The main rebel group in Sudan agreed to a US-proposed ceasefire, while a UN-backed monitor confirmed that famine is present in the Sudanese town of El Fasher.
Tech and AI: Google’s Gemini 3 is likely to be widely deployed by the end of the year, and it may be state-of-the-art on some benchmarks.
Economy: The US Supreme Court hinted that it would rule against most of Trump’s second-term tariffs.
Forecasts:
Forecasters estimate that there’s a 25% chance (18% to 35%) that any form of ceasefire between Sudan’s government and the rebel Rapid Support Forces (RSF) will be in place on January 1, 2026.
They think there’s a 13% chance (6.0% to 25%) that at least 500K people will be evacuated from Iran’s capital Tehran by the end of January.
And they believe there’s a 71% chance (55% to 90%) that the Supreme Court will rule that Trump’s use of a 1977 law to impose the majority of his second term tariffs was unlawful.
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Geopolitics
Middle East
Following years of drought in Iran, the driest autumn in 57 years is causing crisis-level depletion of water reservoirs serving Tehran. In a speech last Thursday, Iranian President Pezeshkian warned that if rain doesn’t fall through December, then Iran’s capital would need to be evacuated: “If it doesn’t rain, we will have to start restricting water supplies in Tehran next month [the Iranian month Azar, Nov 21-Dec 20]. If the drought continues, we will run out of water and be forced to evacuate the city.” Pezeshkian said that transporting water to Tehran could cost up to €4 ($4.65) per cubic meter and would not be sustainable.
Pezeshkian previously warned on October 2 that the nation’s capital would need to be moved, no matter what: moving the capital “is not a choice, it is a mandate.” The Iranian government announced in January that the capital would be moved to the southern coastal region of Makran because of the increasing inability to meet the water and power demands of Tehran’s large population. But at that time, plans were only in an exploratory stage and not considered to be urgent; the idea of moving the capital has been considered for decades.
Ahad Vazifeh, head of Iran’s National Center for Climate and Drought Crisis Management, said that the winter forecast for Iran suggests that the west and central regions of Iran may have normal rainfall levels. And Managing Director Mohsen Ardakani of the Tehran Water and Wastewater Company (Abfa) said that rain is expected to return in the second half of December.
But if the rain doesn’t come, then any need to evacuate Tehran may cause an existential crisis for the Iranian regime. In his speech, Pezeshkian acknowledged that mismanagement has contributed to the current water crisis; resentment of government corruption and water mismanagement could boil over if Tehran’s residents are forced to leave their homes and businesses.
Nearly 10 million people live in Tehran proper and nearly 18 million in its greater metropolitan area; Tehran is the 24th most populous metropolitan area in the world. While wars, the partition of India and Pakistan, and natural disasters have caused large urban and regional evacuations historically, an evacuation of millions of people from a metropolitan area in a short period of time would have few historical analogues. Such population movements and the resulting political instability they cause are expected to occur increasingly frequently over the coming decades because of climate change.
Forecasters estimate that there’s a 13% chance (6.0% to 25%) that at least 500K people will be evacuated from Tehran by the end of January. They point out that while there is almost no chance of rain in the next 14 days, some rain is currently expected in late December, and if that happens, the crisis will be averted. If the government starts restrictions within a week or so and are ok risking having a very short runway, the city might avoid an evacuation. Weather forecasts on the 2-week to 2-month range are generally difficult, and so there is a high amount of irreducible uncertainty..
Iran was accused by the United States and Israel of plotting to assassinate the Israeli ambassador to Mexico, in retaliation for the 2024 Israeli strike on the Iranian embassy in Syria. Mexico reportedly foiled the plot.
Israel carried out strikes against Hezbollah targets in southern Lebanon and warned of more to come. Israel’s defense minister also accused Lebanon of dragging its feet when it comes to disarming Hezbollah.
Foreign ministers from a number of Arab and Muslim-majority states gathered in Istanbul to discuss the state of the ceasefire in Gaza and the prospect of establishing an international stabilisation force there.
Trump announced that Kazakhstan would soon join the Abraham Accords, normalizing relations with Israel. Kazakhstan recognized Israel in 1992; the move would deepen ties between the two countries.
Africa
The rebel Rapid Support Forces (RSF) in Sudan agreed to a humanitarian ceasefire proposed by the US, Saudi Arabia, the UAE and Egypt, but Sudan’s government said that the fighting could only stop when the RSF is dismantled and disarmed and its leader held accountable. Forecasters estimate that there’s a 25% chance (18% to 35%) that any form of ceasefire between Sudan’s government and the RSF will be in place on January 1, 2026.
The UN-supported Integrated Food Security Phase Classification (IPC) says that famine is ongoing in parts of Sudan. It has been confirmed in the towns of El Fasher, which recently fell to the RSF after a long siege, and Kadugli. Twenty other areas are at risk of famine.
The Americas
South America
The Trump administration reportedly informed Congress that it currently lacks legal justification to strike targets on Venezuelan soil, but also that it is seeking a legal opinion from the Department of Justice to justify striking land targets without Congressional authorization. Meanwhile, an attempt by US Senate Democrats to require Trump to ask Congress to authorize any strikes on Venezuelan territory failed after a 49-51 vote, with only libertarian Rand Paul and Alaska moderate Lisa Murkowski voting in favour of it on the Republican side.
The Atlantic reported that Maduro might be willing to leave power, “If there is enough pressure, and if there is enough candy in the dish,” as one source put it.
Meanwhile, the ongoing US military buildup in the Caribbean may be nearing completion. The US conducted more strikes against alleged drug boats near Venezuela. The US conducted more B-52 flights near Venezuela. The USS Gerald Ford aircraft carrier transited into the Atlantic Ocean and, based primarily on P-8 flight and supply ship paths, is thought to be on its way to the Caribbean, after holding near Morocco for a couple days; P-8 Poseidon aircraft routinely support aircraft carriers during movements. The US military also began to fly missions in the Caribbean out of El Salvador in mid-October.
United States
The US Army plans to ramp up drone purchases. The Army will buy at least 1M drones over the next two to three years and anywhere between half a million and millions per year after that. The Army currently buys only about 50k drones per year.
Some Republican-aligned influencers have been saying for some time that the judicial branch of the government has been hampering Trump administration goals. One such influencer suggested last week that the Trump administration could “completely ignore” what they consider to be “nonsensical court rulings“. One forecaster suggests this could be risky because if the administration ignores rulings from the Supreme Court, there may not be a clear arbitrator for deciding the outcome of a contested election, as in Bush v. Gore.
ICE has been acting very aggressively in Chicago.
Europe
North Korea has sent 5,000 “construction troops” to Russia since September, to assist in infrastructure reconstruction.
The United Kingdom is sending Royal Air Force (RAF) personnel and equipment to Belgium to counter incursions into the country by suspected Russian drones.
Asia
China’s first electromagnetic catapult aircraft carrier was commissioned. President Xi Jinping attended the commissioning ceremony and inspected the ship. Forecasters note that the United States already had such a system installed on Gerald R. Ford-class carriers starting in 2017, so in this respect, China is almost a decade behind the US.
Technology and artificial intelligence
Google DeepMind’s Gemini 3 is likely to be widely deployed this month. OpenAI’s ChatGPT-5.1 will likely also be deployed soon. Rumours suggest that Gemini 3 will be state-of-the-art on Humanity’s Last Exam.
Kimi K2 Thinking was released. It’s an open-weight reasoning model that appears to be state-of-the-art on some benchmarks and is developed by Chinese company Moonshot.
Yoshua Bengio, one of the godfathers of AI, has argued that AI companies should be made to buy nuclear-style liability insurance.
The EU is set to water down its AI act, after lobbying from Big Tech companies.
OpenAI published a new blog post in which they said they treat the risks of superintelligent AI systems as “potentially catastrophic,” suggesting that under some circumstances, the whole field may need to slow AI development. They also said that nobody should deploy uncontrollable superintelligence, and that to avoid this, more work is needed.
OpenAI’s CFO suggested that the US government should “backstop” OpenAI’s investments in AI infrastructure.
The backstop, the guarantee, that allows the financing to happen, that can really drop the cost of the financing but also increase the loan-to-value, so the amount of debt that you can take on top of an equity portion.
These comments were quickly walked back, and CEO Sam Altman denied that OpenAI wanted financial support, saying that instead, the US government could consider investing in its own datacenters and guaranteeing loans for new US chip fabs. He also said that OpenAI has $20B ARR and about $1.4 trillion in data center commitments.
About a week earlier, OpenAI submitted a document to Michael Kratsios, the director of the Office of Science and Technology Policy, in which the company asked for US government support for the AI industry.
This mess may have contributed to the significant declines in AI equities last week, compounded by concerns of a financial bubble.
David Sacks, a top science and technology advisor to President Trump, said, “There will be no federal bailout for AI”, but also gave OpenAI the benefit of the doubt and said that the company probably wasn’t actually asking for a bailout.
Denmark and New Zealand are making moves toward regulating deepfakes.
Economy
In the US, the lines of questioning pursued by both conservative and liberal Supreme Court justices in the Learning Resources v. Trump and Trump v. V.O.S. Selections, Inc. cases suggest that the justices are likely to rule against the Trump administration on the question of whether its use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs was lawful.
These tariffs were mostly announced on so-called Liberation Day back in April. The case does not concern Section 232 tariffs on steel and aluminum. Section 338 of the Smoot-Hawley Tariff Act might be the administration’s best bet to reimpose any tariffs ruled illegal by the Supreme Court.
At the end of August, we forecasted a 58% chance (range: 40% to 70%) that the Supreme Court will rule against three-quarters of Trump’s tariffs by dollar value (at the time of forecasting). This time around, we forecast a 71% chance (55% to 90%) that the Supreme Court will rule that Trump’s use of the IEEPA to impose these tariffs was unlawful.
What’s the probability Trump actually stops imposing tariffs if the supreme court deems it unlawful?