What We’re Watching

📍Iranian Water Crisis Intensifies

Facts: Iran is facing a severe water shortage amid the nation’s worst drought in 60 years. 19 reservoirs–around 10% of Iran’s water supply–have run entirely dry, and over 20 more are under 5% capacity. Reservoirs in Tehran are at 7% capacity while those in Mashhad, Iran’s second largest city, sit at only 3%, forcing water usage reductions in both cities. Iranian President Masoud Pezeshkian warned that if no rain comes by December, rationing would intensify in the capital and evacuation of the city may follow. Current water shortages are exacerbated by the government’s apparent mismanagement of water systems, including illegal well drilling, over-construction of dams, and inefficient agricultural practices.

Analysis: Current shortages in Iran indicate the possibility of water bankruptcy: when demand chronically exceeds supply and water resources are irreversibly depleted. Such a crisis would contribute to public backlash, potentially leading to protests like those in 2018 and 2021 over water shortages. In conjunction with rising inflation, housing unaffordability, and conflicts with Israel and the U.S., widespread social unrest would have stark implications for Tehran. The water crisis threatens Iran’s ability to project power as a regional player, creating potential openings for rival actors to fill the void..

📍Anthropic Reports First Case of AI-Orchestrated Cyber Espionage

Facts: On Nov. 13, Anthropic, an AI safety and research company, announced that it blocked a China-backed “cyber espionage” campaign believed to be the first documented case of a large-scale cyber attack executed almost entirely by AI. After the detection of suspicious activity in mid-September, an Anthropic investigation uncovered a “highly sophisticated espionage campaign” that targeted thirty global actors, including large tech companies, government agencies, financial institutions, and chemical manufacturers. Anthropic has stated with “high confidence” that a Chinese state-sponsored group successfully manipulated its Claude Code AI tool, which is trained extensively to avoid harmful actions, to bypass safety guardrails and autonomously exploit digital infrastructure vulnerabilities.

Analysis: The revelation that cyber operations are no longer limited by human capacity marks a dramatic inflection point in the evolving cybersecurity landscape. Just last month, OpenAI issued a report detailing disruptions of over 40 cases of malicious cyber cases. This underscores a systemic, evolving threat of private and state-backed AI offensive cyber operations. Even as developers strengthen detection capabilities and develop complex safety measures within AI models, Anthropic’s case demonstrates that well-aligned models can be coerced into harmful behavior. As businesses and governments continue to turn towards generative AI to boost productivity and advance innovation, cybersecurity can solidify itself as a critical foundation for the protection of the digital ecosystem at home and abroad.

📍Kazakhstan Joins Abraham Accords at U.S.-Central Asia Summit

Facts: During a summit with President Trump on Nov. 6, Kazakhstan announced its intent to become the first Central Asian country to join the Abraham Accords. Despite already strong ties with Israel, Kazakhstan’s entrance expands the reach of the U.S.-brokered agreement normalizing relations between Israel and several Arab countries. The arrangement accompanies a new mutual investment package exceeding $17 billion, with a prominent focus on developing the country’s critical infrastructure. Kazakh President Kassym-Jomart Tokayev emphasized the move as a broader strategic diversification of the nation’s foreign policy and partnerships in the world.

Analysis: Kazakhstan’s decision serves as a critical expansion of U.S. strategy on multiple fronts. By extending the Middle East-based framework into Central Asia, Washington gains a reinforced diplomatic foothold in a region traditionally dominated by Russia and China. The extensive investment package on critical minerals and infrastructure development strengthens American economic ties in Central Asia, giving the U.S. a greater hand in shaping regional development conditions. For U.S. policy in the Middle East, the move expands the legitimacy of the Accords, giving the U.S. greater negotiating leverage heading into Saudi Prince Mohammed Bin Salem’s visit to Washington on Nov. 18.

📍UK Stops Some Intelligence Sharing with U.S. Over Caribbean Boat Strikes

Facts: The U.K. has stopped sharing some intelligence with the U.S. over the striking of alleged drug trafficking boats in the Caribbean. The U.K. is concerned about the legality of U.S. strikes on such vessels and has withheld relevant intelligence for over a month to avoid complicity in a potential breach of international law. The U.K., through its Caribbean holdings, previously shared intelligence with the U.S. to locate trafficking vessels and seize drugs. While Downing Street and the Pentagon refused to comment, neither denied the reports. The U.S. has conducted 14 strikes on boats near Venezuela since September, with casualties rising above 76.

Analysis: The reduction in the U.K.’s intelligence-sharing demonstrates its preference of maintaining legal norms over enabling unilateral action by the US. The rift is likely to weaken counter-narcotics efforts, allowing traffickers to exploit gaps. The stoppage shows that U.S. allies are trending towards insulating themselves from American actions in an increasingly multipolar world where U.S. power may not save them from the potential resulting fallout. Moreover, intelligence halts between Five Eyes member countries (U.S., U.K., Australia, New Zealand, and Canada) are likely to erode trust within the organization. This risks a reduction in cooperation with unrelated matters like terrorism or cyber-attacks, threatening American lives and infrastructure.

📍Orban Announces U.S. Will Provide "Financial Shield” for Hungary

Facts: Hungarian Prime Minister Victor Orban announced on Nov. 9 that the U.S. will provide a “financial shield” for Hungary. Hungary’s economy stagnated amid a freeze of stimulus funds from the EU and high inflation caused by the Russo-Ukraine War, prompting Orban to seek aid from outside the EU. The announcement follows a Nov. 7 meeting between Orban and Trump, where Orban secured exemptions from U.S. sanctions on using Russian oil. The deal will potentially include financing for the construction of nuclear reactors, a currency swap agreement, and a Hungarian commitment to purchase around $1 billion of U.S. gas and military equipment. The EU leveled the funding freeze on Hungary in 2022, demanding that Orban’s government meet baseline conditions for democracy. Hungary responded by deepening ties with Beijing and taking out a €1 billion loan from Chinese banks in 2024.

Analysis: Orban’s agreement with Trump is a byproduct of his warm relations with the U.S. president, serving as a powerful political tool for Orban as he prepares for April elections. The deal gives Hungary an opportunity to undermine the EU’s economic and political pressure, which Orban described as “financial blackmail.” Trump’s positive relationship with the pro-Russian Hungarian prime minister may also weaken the pressure that the U.S. has placed on Putin over a peace deal in Ukraine, leading officials to emphasize the unofficial status of the agreement. However, Hungarian leaders are using the agreement to suggest that the U.S. has committed to defend Hungary against opposition from European nations, effectively aligning the administration with pro-Russian and anti-Western forces.

📍Houthis Halt Red Sea Shipping Attacks

Facts: In an undated letter to Hamas leadership, the Houthi rebels announced they will stop their attacks on Red Sea shipping vessels. Since their attacks began in 2023, the Houthis have repeatedly targeted important trade routes and sank at least four ships. The attacks “reduced foreign exchange inflows” via the Suez Canal by over $6 billion in 2024, a significant amount compared to the $10 billion total that Egypt netted from the canal the year prior. The group also announced that they would resume attacks should Israel violate the ceasefire deal in Gaza.

Analysis: If the Houthis stop their attacks on shipping vessels, trade routes in the Red Sea will be far safer and easier to access. Accessing the Bab-el-Mandeb strait has been especially dangerous due to Houthi attacks; the strait sees around a quarter of global shipping pass through it each year, including 4.5 million barrels of oil each day. Many ships were previously re-routed to avoid the Red Sea, increasing transit times by 30%. Even though the U.S. trades mainly with its immediate neighbors and Europe, 12% of its imports come through the Red Sea each year. For the wellbeing of the global economy, safe passage through the Red Sea is key and will benefit markets globally.

Looking Ahead

📍Iceland Raises Alarms About Icelandic Ocean Current Flow

Our View: Amid conscious US efforts to move away from sustainable climate policy, Iceland announced on Nov. 12 that it will designate the Atlantic Meridional Overturning Circulation (AMOC) a national security risk. AMOC is an ocean current that brings warm water north, preventing extreme winter temperatures across Europe. The last Ice Age, which ended nearly 12,000 years ago, began when the current collapsed—a second collapse could cause a similar crisis. Though unlikely in the near future, such a collapse would be devastating, disrupting climate and agricultural patterns from South America to the east coast of the U.S.

What We’re Reading

💡Thousands have taken to the streets during recent Gen-Z protests in Mexico. The country is the latest of several to face Gen-Z protests against corruption, violence, and inequality.

💡Poland’s Chief of the General Staff accused Russia of laying the groundwork for a potential invasion, saying Poland is effectively in a prewar stage.

💡On Nov. 11 Turkish prosecutors charged Istanbul mayor and 2028 opposition party candidate Ekrem Imamoglu with 142 corruption charges with jail terms ranging from 828 to 2,352 years.