Geopolitics in 2026
The global backdrop right now is unusually busy. Multiple flashpoints are competing for attention at the same time; and when headlines overlap, markets can move fast, even if the underlying economics haven’t changed much. Here’s a clear, up-to-date view of what's happening in the world as we start 2026 and what we are keeping our eyes on geopolitically when managing portfolios.
Venezuela
The biggest surprise early this month was Operation Absolute Resolve and the capture of Venezuela’s president Nicolás Maduro. This was a massive, coordinated operation involving roughly 150 aircraft involved in everything from signal jamming to destroying air defense systems to transporting Delta Force to Maduro's compound for his capture. President Trump also noted the "lights in Caracas were turned off due to a certain expertise we have". Aside from this being an extraordinary demonstration of the DoD's collective power, this was an extraordinary geopolitical development—but the immediate market reaction has been more muted than many expected, especially in oil.
That’s largely because Venezuela’s production infrastructure has been neglected for years, and the global market has been dealing with ample supply. Even serious geopolitical events don’t always translate into a sustained oil spike if the barrels aren’t easily “investable” or quickly scalable. In fact, early commentary around Trump’s discussions with senior oil executives suggests the industry isn’t unanimously eager to pour capital into Venezuela. The obstacles are practical: political uncertainty, the risk of prolonged instability, high upfront costs, and ROI that looks less compelling when crude is under pressure. Even in an optimistic scenario, rebuilding meaningful capacity could require enormous capital over many years.
While this operation could be seen as the United States aggressively defending the Western Hemisphere, operations like this can also set precedents in the eyes of rivals. Russia and China may frame it as a double standard: “How can the U.S. criticize our intentions in Ukraine or Taiwan if it conducts major intervention operations in the Western Hemisphere?”
Finally, Venezuela’s oil flows still matter for regional stability even if they don’t move global pricing dramatically. China has historically been a major destination for Venezuelan crude, roughly 68% of Venezuelan crude exports have gone to China, while about 4% has supported Cuba. This only amounts to about 5% of China’s needs, but for Cuba this could create additional strain on the country that is already under serious pressure.
Russia and Ukraine
The Russia–Ukraine war continues to grind on, with Russia making incremental gains at high cost (gained roughly 15-20% of Ukraine territory with over 1,000,000 casualties in 4 years) and little public indication that Putin is eager to negotiate. Meanwhile, Zelensky’s concerns remain consistent: territorial concessions are difficult to accept, and security guarantees are essential for any durable peace. Some European countries have floated the idea of Article 5–like assurances outside formal NATO membership—an attempt to thread the needle between deterrence and escalation risk.
What investors should notice isn’t just the front line, but also the energy/shipping layer. Drone attacks in the Black Sea are raising shipping risk and insurance costs, and pressure on Russia’s oil export channels can influence risk sentiment quickly, even when it doesn’t immediately change headline oil prices. The tracking and seizure of the shadow fleet, like the Marinera veseel, and tighter enforcement efforts, are a reminder that geopolitical risk can show up through logistics, insurance costs, and sudden policy moves.
Gaza and the Middle East
The Middle East remains a major source of uncertainty, and attention is now shifting toward the difficult "Phase 2" questions: demilitarization/disarming Hamas, building an international security framework, and establishing a technocratic Palestinian administration in Gaza. Multiple countries may be willing to contribute to stabilization efforts, but far fewer want to be pulled into direct confrontation with Hamas. This is one of those situations where progress is possible, but setbacks can happen quickly.
For markets, this is less about day-to-day headlines and more about the risk of broader escalation affecting energy logistics and regional stability.
Iran
Iran is experiencing widespread demonstrations and significant unrest, with reports of tens of thousands of detentions and hundreds, if not thousands, of executions in an aggressive effort to control protestors. The regime appears weaker than it has in decades, and the economic strain is visible in the lowest GDP per capita in 20 years (outside of COVID years), severe inflation, and long-term living-standard decline.
The central strategic question (and the market question) is the same: if pressure intensifies—diplomatic, economic, or military—what is the realistic end state, and how does it affect energy routes and global risk appetite? Iran has hinted they might be willing to negotiate with US on the future of their nuclear program, but this could just be to stall further US intervention. This is another case of a “then what” dilemma for the US. If military operations commence, what happens after? The vast majority of Americans don’t have any desire to see our government try an Iraq-style occupation of Iran.
The Arctic and Greenland
Greenland has also re-entered the conversation as a strategic location in a changing Arctic. One notable dynamic is that Greenland may be open to expanded U.S. basing or access arrangements without giving up sovereignty—an approach that matters because taking territory by force would raise severe NATO and alliance complications.
Aside from its strategic location, another possible reason Greenland is getting attention is resources. Rare earths and critical minerals are now a national security topic, not just a commodities story. Estimates show China with ~44M metric tons, U.S. ~1.9M, and Greenland ~1.5M in rare earth reserves. China’s reserve base and processing dominance keep the U.S. and allies focused on diversifying and protecting supply chains—supporting longer-cycle investment themes tied to minerals, energy, industrial capacity, and technology inputs.
U.S. National Security Spending
Congress’s FY26 NDAA and the broader national security posture point toward sustained emphasis on procurement, readiness, and next-generation capabilities (including biotech and Indo-Pacific deterrence efforts). Meanwhile, Trump has floated a $1.5T FY27 defense budget, which could bolster parts of the industrial base, but would also have secondary monetary and fiscal implications.
At the same time, initiatives like the Genesis Mission suggest a continued acceleration in advanced technology competition. President Trump has likened this mission to the Manhattan Project in terms of scale and urgency. The United States is in an arms race with China to create a platform capable of quantum general artificial intelligence; a technology that could create incredible breakthroughs for humanity, but one that has to be kept away from bad actors. This race would seem to ripple outward into demand for power, data infrastructure, chips, cybersecurity, and critical materials—areas that can become structural growth themes even when broader markets are choppy.
A Human Ending
Yes, there’s a lot going on in the world as we start 2026. And yes, markets can swing when the world feels unstable. But this isn’t doomsday. We can’t control world events, and we don’t pretend we can forecast every global headline. But we are working hard to understand the reality of global events so we manage risk and allocations thoughtfully, avoid overreacting, and position portfolios so they can endure uncertainty and still participate in long-term growth.
The world will always have headlines. There will always be those insistent on fearmongering. But we work to make sure your money is protected so you can spend your time in better ways. We hope you spend that time focusing on being good people and providing value to the world, taking care of your health and relationships, and enjoying the day-to-day. Regardless of what the news headlines looking for clicks say, there’s so much to be grateful for, and we view the future with excitement and promise, not fear.