Risk Outlook: September 29, 2026

Sep 29, 2026

Welcome to the Stepwise Risk Outlook, which highlights and contextualizes over-the-horizon developments in key regions of the world and industries of the global market.

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Global

Patterns in global LNG energy trade are shifting under the weight of geopolitical conflict, demonstrating that global gas markets are rebalancing to build in greater resilience. Energy trade is no longer organized solely around the cheapest supplier or shortest route. The preference for buying LNG on the spot market is giving way to renewed interest in long-term LNG contracts to mitigate against acute shortages or unaffordable bills. Countries and companies are prioritizing diversification to reduce dependence on one dominant source or market. This is creating strong incentives for alternative suppliers and markets for LNG, with the market expected to grow by 7% in 2026.

Canada is now poised to become a major LNG supplier to Asia and Europe. Canada’s decision to become an energy superpower is being driven by a domestic re-evaluation of the value of fossil fuels to national economic security under the Carney government. The souring of relations with the US has created further incentives to develop the Canadian oil sands for export to Asian and European markets. New policies supporting investment and easing regulatory and permitting uncertainty have unlocked the sector, drawing the interests of energy majors to form international consortiums such as Canada LNG. Proposed LNG export projects could enable Canada to send 55% of its natural-gas exports to non-US markets by the early to mid-2030s, according to the government’s estimate.

Read More: Wall Street Journal [paywall], Financial Times [paywall], International Energy Agency

Europe

EU defense ministers discussed a bloc-wide “emergency security protocol” yesterday, but reception appears icy. In her annual State of the European Union speech about two weeks ago, European Commission President Ursula von der Leyen proposed a “European Security Council” to coordinate responses to hybrid or conventional threats. This emergency protocol would therefore be similar to Article IV in NATO, which is when allies can convene upon request to discuss a security matter (this was triggered twice last year due to Russian drone incursions onto NATO territory). But some officials reportedly view the EU as the wrong forum to discuss these matters due to stringent transparency rules. The EU’s chief diplomat, Kaja Kallas, emphasized in a press conference that discussions over an emergency security protocol are “initial” and there was a strong understanding that such a protocol would not duplicate NATO’s Article IV.

Read More: Politico, Financial Times [paywall], European External Action Service

Middle East

US forces are scheduled to pull out of Iraq by Wednesday, ending the military presence after 23 years. The withdrawal, agreed to by Washington and Baghdad in 2024, is widely celebrated in Iraq. However, it risks creating a security vacuum. Pro-Iranian militia groups are poised to seek greater influence over security and politics. Sunni tribal leaders are concerned about a resurgence of ethnic conflict. Islamic State (ISIS) fighters remain embedded in the Sunni community and could seek to exploit the US withdrawal to reassert its agenda to establish a caliphate in Iraq.

The future of the US relationship with Iraq is uncertain. Some analysts assess that the departure of troops is yet another example of the US abandoning its partners. Others, opposed to the US “forever wars,” argue that Iraq needs to move forward with security reform, disarming militias and integrating fighters into Iraq’s Armed Forces, measures that could not be taken while the US “occupying force” remained in the country. The departure will allow the US and Iraq to normalize the bilateral relationship, shifting focus to diplomacy and trade. Baghdad wants US companies to stay and invest in the country’s future. Their presence, if coupled with continued US intelligence cooperation, counterterrorism support and security assistance, could help create a new foundation for the bilateral relationship and the prospect for greater stability in the Arab heartland.

Read More: Reuters [paywall], Atlantic Council

Asia-Pacific

South Korea on Tuesday said land mines that severely injured two South Korean soldiers in the demilitarized zone (DMZ) were “highly likely” to have been planted by North Korea. The explosions occurred roughly 30 feet south of the Military Demarcation Line (MDL), on the South Korean side of the border. South Korea’s military said evidence indicated the mines were North Korean and appeared to have been deliberately planted, rather than having migrated from the North, amid Pyongyang’s recent border fortification efforts.

Seoul’s military has called the incident a clear violation of the Korean War armistice and warned of “appropriate and corresponding” measures, while President Lee Jae Myung has called for a thorough investigation before determining a response. The distinction is significant: the UN Command has said recent North Korean fencing, road repairs and defensive mine-laying do not violate the armistice if they remain north of the MDL, while mines placed south of the MDL would constitute a violation. The incident overall complicates Lee’s efforts to prioritize engagement with Pyongyang, potentially forcing Seoul to balance its push for dialogue with a military response if North Korean responsibility is confirmed.

Read More: Yonhap News Agency, NK News, Wall Street Journal [paywall], Reuters [paywall]

Americas

The Venezuelan government released more than three dozen political prisoners over the weekend. According to human rights groups, 39 dissidents were freed from across multiple prisons between Friday and Saturday. Eight were accused of narco-terrorism, and six were accused of working with the US government to overthrow former Venezuelan President Nicolas Maduro. As of September 18, 344 political prisoners reportedly remained in detention, after the Venezuelan government announced it had freed 131 people. More than 1,000 political prisoners have been freed so far this year.

The recent release coincided with the second round of talks between the Venezuelan interim government and the opposition. The first round of negotiations in August focused on earthquake recovery and retrieving frozen overseas funds. In the talks, the opposition is led by Dinorah Figuera, while Maria Corina Machado remains in exile. The talks are ostensibly aimed at eventually holding elections. At the UN General Assembly last week, Venezuela’s interim President Delcy Rodriguez promised that Venezuela would eventually hold elections, although she did not give a timeline. The ongoing release of political prisoners, despite having slowed in recent months, provides concrete momentum for the ongoing opposition talks.

Read More: Al Jazeera, ABC, BBC [paywall]

Africa

The Ethiopian National Defense Force (ENDF) reportedly captured the strategically located town of Alamata as part of its push to regain control of Tigray’s capital. Alamata lies near Tigray’s southern border with Amhara and serves as a key logistics hub for the movement of troops, fuel, and supplies. The ENDF is advancing toward Mekelle, Tigray’s capital, in an effort to reverse recent tactical gains made by the Tigray People’s Liberation Front (TPLF) across the region. The TPLF appears to retain control of all three airports in Tigray, which are typically under federal authority, limiting the ENDF’s ability to airlift reinforcements directly into the region. During the first Tigray war, however, control of Alamata shifted multiple times, highlighting that this tactical success may prove temporary.

Meanwhile, fighting continues across the neighboring Afar and Amhara regions. The ENDF remains engaged with both the TPLF and the Amhara Fano Nationalist Movement, a rebel group affiliated with the Alliance for Survival. The Tigrayan rebels’ offensive into Afar may be aimed at disrupting supply routes from Djibouti, Ethiopia’s key economic partner and principal gateway to Red Sea trade. The TPLF has yet to capture sufficient territory to effectively block these trade corridors. If it were to do so, however, it could significantly shift the conflict in the rebels’ favor while likely triggering a major escalation from Addis Ababa.

Read More: Reuters [paywall], Al Jazeera, Critical Threats, Council on Foreign Relations

Geoeconomics

US Section 232 pharmaceutical tariffs expanded on September 29, exposing imported patented medicines and their ingredients to a default duty of 100%, subject to extensive exemptions. The April order had already taken effect for designated companies on July 31; the latest deadline extends it to remaining manufacturers. Generics and biosimilars remain outside this round. Covered products from the EU, Japan, South Korea, Switzerland and Liechtenstein face a 15% rate unless they qualify for lower treatment, while British products receive zero Section 232 duties. Commerce also clarified exemptions for specified specialty medicines from designated trading partners, including India, covering categories such as cell and gene therapies and plasma-derived treatments. Imports used solely for clinical trials, research or other noncommercial purposes also qualify for zero duties.

The policy ties tariff relief to US manufacturing commitments and drug-pricing concessions. Manufacturers with approved US production plans can qualify for a 20% rate, while those also accepting most-favored-nation pricing agreements, linking American prices to lower prices abroad, can receive zero duties through January 20, 2029. The 20% rate is scheduled to rise to 100% in April 2030. These arrangements could encourage investment in American production, but additional American factories may also continue relying on foreign ingredients, meaning that domestic investment alone will not eliminate the supply dependencies used to justify the tariffs.

Disruptive Technology

ICYMI: A DC appeals court upheld the Pentagon’s designation of Anthropic as a supply chain risk. The designation, which previously was only applied to foreign companies, disallows the Pentagon and any military contractor from using Anthropic’s applications in their operations or supply chain. The company was designated after pushing back against the Pentagon’s use of Claude for military operations, which is a violation of Anthropic’s code. Politically, the Trump administration and Anthropic also diverge on whether to slow down AI development and how to regulate AI deployment. In the meantime, Anthropic could petition the full DC Court of Appeals or appeal to the Supreme Court. A separate but parallel supply chain risk designation was struck down by a San Francisco appeals court in August.

Read More: The Hill, Politico, CNBC

Energy

Russia will restrict the amount of energy data it publishes going forward. Russian President Vladimir Putin has approved a decree tightening rules governing the publication of data about the country’s energy trade. The new decree prohibits publication and access to any information about Russia’s export contracts: volumes, prices, method of transport, payment settlements, and other relevant details. The decree will also affect what media outlets can publish.

The move is designed to hinder efforts at sanctions enforcement by Western countries. It is the continuation of past decisions to restrict outside access to information about Russia’s trade and economic situation in order to undercut sanctions against the country. For example, Russia had already shut off access to official data about crude oil production prior to the new decree.

Read More: Reuters [paywall], Bloomberg [paywall], Meduza

Defense

The Navy’s revitalization efforts for public shipyards will likely take longer than originally expected. The Government Accountability Office (GAO) has reported that the Shipyard Infrastructure Optimization Program (SIOP) – which the Navy originally estimated at $21 billion dollars – will actually run up a price tag of almost $200 billion. The GAO also assessed that SIOP could take decades longer than originally estimated by the Navy, lasting 50 years instead of the original assessment of 20 years. The GAO report concluded that the initial estimate, made in 2018, “omitted key costs” and that factors such as commodity prices are also contributing to increases in the overall price tag. The SIOP is designed to revitalize the US’ four public shipyards in Virginia, Maine, Washington and Hawaii that handle repairs for the Navy’s nuclear-powered vessels.

Read More: Breaking Defense, Defense One, Business Insider