Global daily the heat you feel isnt just the summer sun

Marketing communication 18 August 2026

The heat you feel isn't just the summer sun Global Daily

RaboResearch Market comment Global Economics & Markets There is a lot of geopolitical heat out there right now; and markets may get burned by it. knowledge.rabobank.com The 60-day US-Iran Memorandum of Misunderstanding has lapsed, with Trump and Iran both rejecting any extension while claiming control of Hormuz. In our view, the US is unlikely to Michael Every restart major military action until after the November midterms. (Note the US just awarded a Global Strategist $23bn contract to Raytheon to accelerate annual Tomahawk missile production to over 1,000 from the current 60 alongside a $59bn Lockheed Martin deal to ramp up Patriot interceptor output from 600 to 2,000.)

Trump’s threat to bomb Oman is public diplomacy matching what Tehran threatens privately to ensure Muscat doesn’t close off the southern Hormuz passage allowing ship-to-ship oil shuttling that, according to the US, is seeing significant flows. The Saudis are now offering to sell oil near Oman; a sign they may be copying the UAE. That doesn’t help with refined products, where the US will announce steps to boost refiners’ throughput: by running at 120% of capacity?

However, as previously argued, relative energy calm incentivises Iran to escalate sooner. Israeli intel claims Tehran has achieved a remarkable recovery in its ballistic missile production by ignoring the needs of the civilian economy; the Wall Street Journal reports Iran is preparing to foment unrest in the Gulf, cut undersea internet cables, further destabilise the Red Sea via the Houthis, and move troops into Kuwait to force the US into a boots-on-the-ground game. Despite US efforts to stabilise Lebanon (by disarming Hezbollah) and Gaza (by disarming Hamas), the above dynamic could destabilise the entire Greater Middle East region.

Meanwhile, tensions remain high on the Russia-Ukraine front. Speculation is that after the Duma elections on September 18-20, Putin may escalate via mobilisation and closing the border; far less likely, a tactical nuclear strike; or a move vs. a Baltic state. The latter would aim to test NATO’s Article 5 resolve within Europe and from the US. This could be coordinated with Iran.

North Korea may also send another 50,000 men to Ukraine. That’s as China-friendly South Korean President Lee is proposing an end to the war with the North, arguably why Trump called to scale back scheduled joint military drills. In reality, that claim was too close to their start to make any difference, but was Trump warning Seoul or helping its bid to restart talks with the North while thinking of Ukraine? We shall see – but simplistic takes of the US ‘walking away from Asia’ are categorically wrong when looking across other news and developments - including Japan revising its national security doctrine after Putin visited the Kuril Islands, which Moscow has held since the end of WW2, to send Tokyo a warning message.

Last week, we had news that the US set ‘ideological loyalty tests’ for NATO members, including asking about stances on Iran. As Bloomberg put it, this “would upend the post-WW2 transatlantic relationship, which was built on US military guarantees that superseded many political disagreements.” Yet NATO’s website states it was created to: “Deter Soviet expansionism”; “Forbid the revival of nationalist militarism”; and “Encourage European political integration.” That is ideology – and Soviet expansionism was global. One can argue the US is --rudely-- pushing Europe and Canada to look at new ideological threats, globally and towards integrating with it – albeit on its terms.

1/7 RaboResearch | The heat you feel isn't just the summer sun | :53 Please note the disclaimer at the end of this document.

Matching that, last week saw a US report naming European countries among those helping China to trans-ship goods to avoid US tariffs.

As Canada braces for 50% US tariffs, the geostrategic logic is clear: either a common external tariff vs. China and trans-shipment, or a higher US tariff vs. those who refuse. Likewise, the US is now telling global partners they cannot be part of its critical minerals and…