CWA # 2299
Conflict Weekly
The War in Ukraine
Five Takeaways of the UNDP 2026 report on the socio-economic effects of the Middle East crisis
Conflict Weekly #353, Vol 7, Nos. 40, 16 October 2026
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NIAS Global Politics Team
16 October 2026
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The War in Ukraine:
Energy ceasefire, Strategic dilemmas, and an Uncertain halt
Lekshmi MK
In the news
On 09 October, Reuters reported on President Trump announcing a deal with Russia to supply more than 300,000 metric tonnes of diesel to US and global markets.
On 11 October, Reuters reported on President Trump announcing an immediate energy ceasefire, claiming both Russia and Ukraine had agreed. In response, President Zelensky said that the announcement was news to him, but said Ukraine would agree if Russia did.
On 12 October, Reuters reported that US officials viewed the deal as a means of encouraging Moscow to return to peace negotiations. Meanwhile, President Zelensky accused Russia of violating the proposed truce after strikes hit six Ukrainian energy targets. Ukraine urged the US to ensure Russia complied with the proposed energy ceasefire.
On 13 October, Reuters reported that Russia did not strike Ukrainian energy targets during the overnight attacks for the first time since Trump’s announcement. Kremlin spokesperson Dmitry Peskov said that contacts concerning the proposed ceasefire were ongoing. Meanwhile, Trump said, “We are helping them, and we are sharing intel with Ukraine.”
Issues at large
1. Trump-led energy ceasefire to advance US interests
President Trump’s announcement of an energy ceasefire between Russia and Ukraine, alongside his defence of the Russian diesel deal, reflects Washington’s attempt to link ceasefire diplomacy with its broader energy interests. By presenting the ceasefire as an immediate initiative while discussing Russian diesel supplies, Trump has sought to influence both Moscow and Kyiv through energy-related arrangements. However, the lack of a mutually confirmed agreement and continued attacks on Ukrainian energy infrastructure highlight the uncertainty surrounding the proposal. Trump’s approach also raises questions about whether ceasefire diplomacy is being used primarily to reduce hostilities or to create room for US strategic and economic interests in global energy markets.
2. The global diesel shortage shapes the US energy diplomacy and ceasefire efforts
The war in the Middle East has disrupted energy supplies and contributed to rising global diesel prices, prompting the G7 countries to release up to 100 million barrels of oil and diesel from emergency reserves over four months. The decision followed pressure from President Trump, who had threatened restrictions on US diesel exports amid rising domestic fuel prices. The G7 also committed to maintaining energy flows between member countries and coordinating refinery operations to improve supply. Against this backdrop, Trump’s proposed energy ceasefire between Russia and Ukraine and his deal for Russian diesel supplies reflect Washington’s efforts to address fuel shortages alongside its diplomatic objectives. By seeking to halt Ukrainian attacks on Russian oil refineries, Trump has also linked the conduct of the war to the availability of fuel in global markets.
3. Continuing strikes on energy infrastructure sustain military and economic pressure
Energy infrastructure remains a strategic target for both Russia and Ukraine, with recent attacks highlighting the continued use of energy assets to exert military and economic pressure. Recently, Russian missile and drone strikes damaged 30 energy facilities in Kyiv and Kharkiv, leaving at least 600,000 people without power. Russia also targeted power plants and railway infrastructure. Ukraine, in turn, has targeted Russian oil refineries to disrupt fuel production and constrain Moscow’s energy revenues. It also struck the Ryazan oil refinery after President Zelensky declared an end to Ukraine’s participation in the proposed energy ceasefire. The attacks on both sides’ energy infrastructure illustrate their differing strategic objectives.
What does it mean?
First, for the US, the proposed energy ceasefire offers an opportunity to advance its energy security and diplomatic interests simultaneously. Amid concerns over diesel shortages and rising fuel prices linked to the Middle East conflict, access to Russian diesel supplies could help ease pressure on global energy markets.
Second, for Russia, the proposed ceasefire could create opportunities to sustain its energy exports and preserve revenues from its oil sector. A reduction in Ukrainian attacks on Russian refineries could protect refining capacity and fuel production. However, Moscow’s continued military operations against Ukrainian energy infrastructure indicate that it has not committed to a sustained halt in attacks.
Third, for Ukraine, the proposed ceasefire offers the possibility of reducing attacks on power plants and energy facilities ahead of winter. However, the absence of a mutually confirmed agreement leaves Kyiv vulnerable to further strikes. Ukraine also faces a dilemma of suspending attacks on Russian refineries without a reciprocal halt to Russian strikes could weaken its leverage over Moscow.
Finally, the proposed energy ceasefire reflects the growing connection between warfare and global energy security. The central question is whether the proposed ceasefire is primarily an effort to stop attacks in Ukraine or a means of securing energy supplies and advancing US energy interests.
Lekshmi MK is a Research Assistant at the National Institute of Advanced Studies, Bengaluru.
"The worst is yet to come": Surging energy prices, Record El Nino and Depleting fiscal buffers
Five Takeaways of the UNDP 2026 report on the socio-economic effects of the Middle East crisis
Preetha Renganarayanan
On 12 October 2026, the United Nations Development Programme (UNDP) released the report titled “No Time to Recover: Compounding Crises, Depleted Fiscal Buffers, and What It Means for Developing Economies.” The report examines the socio-economic effects of the military escalation in the Middle East, drawing on how renewed energy price shocks, record El Niño and rising global borrowing costs are creating a triple shock for developing economies. It notes that governments have so far cushioned households from the full impact of higher prices, but the fiscal costs are becoming difficult to sustain. With rising poverty risks, debt repayments and another climate shock approaching, the report underlines the expanding gap between the need to protect vulnerable populations and governments’ bandwidth to finance the response.
The following are five key takeaways from the report.
1. Developing economies face a triple shock from surging energy prices, record El Niño and rising borrowing costs
Seven months into the Middle East crisis, the situation has transitioned from a single energy shock into three overlapping global pressures. First, brent crude averaged USD 102 per barrel in September, making it a 22 per cent increase since the US-Iran ceasefire broke down in July. Second, El Niño is on course to become the strongest since 1950, with its effects on harvests, food prices, public health and water supplies expected to continue into 2027. Third, global benchmark interest rates have also reached multi-decade highs. These shocks reinforce one another as energy and food inflation erodes household purchasing power whereas expensive credit limits government spending. The report therefore highlights a crisis wherein developing economies have meagre time to recover from one shock before the next compounds its effects.
2. Rising energy prices are weakening price protection mechanisms and increasing the social costs of the crisis
Governments have relied heavily on subsidies, fuel-tax reductions and price controls to contain the transmission of international energy prices to domestic consumers. However, these measures are becoming difficult to sustain. Since the conflict began, retail gasoline and diesel prices across 130 countries have increased by an average of 26 and 38 per cent respectively. The UNDP estimates that global explicit fossil fuel subsidies could exceed USD 1 trillion in 2026. Governments therefore face a two-sided pressure where sustaining price controls is becoming unsustainable, meanwhile withdrawing them risks increasing public discontent. The report thus highlights the weakening of price cushioning as both a fiscal and a political challenge.
3. Record El Niño threatens harvests, food security and household incomes into 2027
The developing El Niño threatens to worsen food insecurity while households and governments are still absorbing the energy shock. The World Meteorological Organization (WMO) predicts the event to continue into at least till February 2027, with risks including above-normal temperatures, droughts and flooding. With this, agriculture, public health, energy and water supplies stand as the most exposed sectors. As per World Food Programme’s (WFP) estimation, by the end of 2027 the El Niño could push at least 49 million additional people into acute food insecurity across 45 countries already facing food insecurity. For developing economies, this means preparing for climate-related food shocks and managing higher energy costs, both at a time when public resources are already squeezed.
4. Rising borrowing costs deepen fiscal pressures and limit development spending
Higher global interest rates could strain the fiscal capacity of developing economies just when their need for emergency support increases. On 29 September, the yield on the 10-year US Treasury bond reached 5.26 per cent, its highest level since 2002. Such high benchmark yields can raise borrowing costs across developing economies, especially for countries with weaker credit ratings, substantial refinancing needs and limited market access. This pressure is compounded by existing debt-servicing obligations, where, at present, the median developing economy spends about 9.5 per cent of government revenue on interest payments alone.
The UNDP’s September survey of 26 country offices sheds light on how the debt pressure coincides with other crises. 13 offices reported pre-existing economic or fiscal crises, 10 reported El Niño-related responses, and nine quoted ongoing conflict or insecurity. The concurrent nature of these pressures deepen the debt-development trade-off. The countries most exposed to these stacked shocks may consequently have the least capacity to fund their response.
5. Targeted price support, El Niño preparedness and multilateral finance emerge as policy priorities
The report identifies three key policy priorities. First, governments must transition from large untargeted price cushioning towards targeted support as the fiscal costs of containing prices rise. UNDP estimates that compensating all households for their income losses would cost 1.1 per cent of developing-country GDP in 2026, compared with 0.3 per cent for compensating households below the USD 6.85 poverty line, making the case for a targeted approach. Second, El Niño preparedness must be integrated into the response to the energy crisis. This can be done through anticipatory action, protection of agricultural inputs during planting windows, food assistance and ‘adaptive social protection.’ Finally, affordable budget and balance-of-payments support from international financial institutions stands crucial for countries unable to finance even targeted interventions.
Preetha Renganarayanan is a Research Assistant at the National Institute of Advanced Studies, Bengaluru.
The Houthi-Saudi Arabia escalation I Pakistan's Khyber Pakhtunkhwa crisis
Ethiopia and Eritrea tensions I South Africa's anti-migrant unrest I Drone strikes in Sudan
Madhura Meenakshi Tanikella, Namrata L Ghanghatkar, Priyanka Makhijani, and Urja R Kudalkar
Pakistan’s Khyber Pakhtunkhwa crisis deepens:
Islamabad imposes emergency rule as police crack-down on pro-Khan protesters
On 14 October, The New Indian Express and other major sources reported that police opened fire at a protest in Bara, Khyber Pakhtunkhwa, three days after President Asif Ali Zardari imposed emergency and governor’s rule in the province on 11 October, suspending the government led by jailed former PM Imran Khan’s Pakistan Tehreek-e-Insaf (PTI). Interior Minister Mohsin Naqvi said federal rule was needed to combat militancy, with the proclamation accusing the provincial government of failing to confront terrorism. Suspended Chief Minister Sohail Afridi, who was leading a march demanding Khan’s release, and some cabinet members were taken into preventive custody, while police raided homes in Swabi district to prevent Afridi’s rally. PTI central information secretary Sheikh Waqas Akram said the party would challenge the takeover in court, calling it a “historic crackdown.” Hassan Abdullah Niazi, an adjunct faculty member at the Lahore University of Management Sciences, called it an unconstitutional move against provincial autonomy. In Bara, a police officer said 11 protesters were injured, while PTI said more than a dozen workers were seriously hurt. Police said they fired warning shots.
Saudi Arabia’s Yemen front widens:
Houthis vow more attacks on airports, oil facilities after strike on Aramco headquarters
On 14 October, Reuters, and other major sources reported that Yemen’s Houthis vowed to press on with attacks on airports and oil facilities in the kingdom, a day after a missile hit Saudi Aramco’s headquarters complex in Dhahran. The BBC reported the strike followed a Saudi-led coalition attack on a Houthi-run fuel depot near Sanaa on 13 October. The Houthis said they fired missiles and drones at Aramco’s Dhahran headquarters, an Aramco refinery in Riyadh, and Riyadh’s airport. The energy ministry reported a “limited fire,” but sources told Reuters the blaze spread between the sixth and 10th floors of an office tower. Debris from intercepted missiles injured four people in Riyadh and damaged 15 homes. The Saudi cabinet, chaired by Crown Prince Mohammed bin Salman, vowed the Houthis would “bear the consequences.” The capital’s airport, hit on 10 October in an attack that killed 13, is closed until 17 October. US President Donald Trump has said Washington might join Saudi strikes, while Houthi official Mohammed Al Bukhaiti warned of a “swift and painful response.” The New Arab, citing Haaretz, reported the Crown Prince rejected Israeli PM Benjamin Netanyahu’s request to join the campaign.
Ethiopia and Eritrea tensions:
Ethiopian Troops advance as war fears grow
On 14 October, Reuters and other major sources reported that Ethiopian government troops advanced to Zalambessa, a town on the border with Eritrea previously held by Tigrayan rebels, as diplomats scrambled to avert war between the two neighbours. Fighting reignited on 23 September when a rebel alliance led by the Tigray People's Liberation Front launched attacks across Tigray, Amhara and Afar, briefly seizing Mekelle and its airport before withdrawing on 03 October. Ethiopia accuses Eritrea of backing the rebels, telling the UN Security Council that Eritrean troops had advanced up to 60 kilometres into Tigray, while Eritrea denies any incursion and calls Addis Ababa's accusations a "declaration of war." Both countries wrote to the UN Security Council, with Ethiopia invoking its right to self-defence and Eritrea urging deterrent measures. Prime Minister Abiy Ahmed has repeatedly said Ethiopia must gain Red Sea access, while Eritrea fears Addis Ababa intends to seize its port of Assab, 45 miles from the border. Analysts warn the confrontation has moved beyond Tigray, with Egypt's dispute with Ethiopia over the Nile dam and the Red Sea's heightened importance amid the Iran war raising the risk of regional spillover. The African Union has appointed former Nigerian president Olusegun Obasanjo as lead negotiator, though Eritrea distrusts the body. Experts described it as the most dangerous moment for the region since the 1998 to 2000 war.
South Africa’s anti-migrant unrest deepens:
Violence in Soweto, Durban forces government to withdraw asylum directive
On 14 October, BBC and other major sources reported that anti-migrant protests turned violent in Johannesburg’s Soweto township and the port city of Durban on 08 October, after demonstrations demanding that refugee offices stop processing asylum applications. Acting National Police Commissioner Lieutenant General Puleng Dimpane said 10 vehicles were torched in Johannesburg and 14 in Durban, where three people were arrested. Foreign-owned shops were looted. Unrest continued in Durban for a second day, with police using rubber bullets, tear gas, and stun grenades, as crowds armed with sticks moved through areas where students and foreign nationals live. The protesters oppose a 07 July Constitutional Court ruling that bars denying asylum seekers access to the system solely on procedural grounds. Government spokesperson William Baloyi blamed deliberate disinformation, saying the ruling does not grant automatic refugee status or residence. On 09 October, the Department of Home Affairs withdrew its directive to resume asylum intake, saying offices were overwhelmed within days and officials faced safety threats. It promised a “fresh process.” Police said calm had returned in Soweto. At least four foreign nationals have been killed in violence this year, according to police.
Drone strikes in Sudan:
Airstrike kills at least 72 gold miners near Egyptian border
Between 09 and 12 October, Reuters and other major sources reported that at least 72 artisanal gold miners were killed in an airstrike in northern Sudan near the Egyptian border, according to the rights group Emergency Lawyers, which accused the Egyptian air force of carrying out the attack. The reported strike occurred in the Wadi area of the mountainous Jabal al-Uqaydat gold-mining region and marked the second such incident in recent months, following a similar strike in June that reportedly killed 23 workers. Egypt's military said that it was continuing a campaign against illegal gold mining in southern Egypt, following the distribution of warning leaflets, but made no direct reference to the latest airstrike or the reported deaths. Two Egyptian security officials stated that the operation aimed to end chaos along the border and prevent groups from seizing control of mining areas. Sudan's army-led government confirmed that the incident occurred in a border area between the two countries and said it was investigating, urging a thorough investigation and respect for territorial boundaries. Emergency Lawyers said a cross-border attack of this nature would violate international law, while images shared by local rights groups and on social media showed bodies among rubble, though the material could not be independently verified. Moreover, the incident comes amid escalating civilian casualties across Sudan, where drone attacks by the Sudanese army and the paramilitary Rapid Support Forces have reportedly intensified. Additionally, a separate drone strike on a displacement camp in Blue Nile state on Friday killed dozens of people, with the United Nations reporting that women and children accounted for most of the casualties.
Madhura Meenakshi Tanikella is an undergraduate student from the Department of Political Science, School of Liberal Arts, Alliance University, Bengaluru. She is currently an intern at NIAS. Namrata L Ghanghatkar, Priyanka Makhijani and Urja R Kudalkar are postgraduate students at the Department of Public Policy, Ramaiah University of Applied Sciences. They are currently Research interns at the National Institute of Advanced Studies (NIAS), Bengaluru.