Osman Orsal/Reuters This is a preview of STRATFOR's annual forecast, click here to read the full report. With old geopolitical realities resurfacing across Eurasia and commodity prices stuck in a slump, 2016 is shaping up to be an unsettling year for much of the world. A logical place to begin is the country that bridges Europe and Asia: Turkey. This is the year when Turkey, nervous but more politically coherent than it was last year, will likely make a military move into northern Syria while trying to enlarge its footprint in northern Iraq. Turkey will not only confront the Islamic State but will also keep Kurdish expansion in check as it raises the stakes in its confrontations with its old rivals, Russia and Iran. The last thing Russia wants is a confrontation with Turkey, the gatekeeper to the Black and Mediterranean seas, but confrontation is something it cannot avoid. Russia risks mission creep this year as it increases its involvement on the Syrian battlefield. But the Islamic State will be only part of Moscow's focus in Syria; Russia will try to draw the US toward a compromise that would slow a Western push into Russia's former Soviet space. The US will be willing to negotiate on tactical issues, but it will deny Moscow the leverage it seeks by linking counterterrorism cooperation to a broader strategic discussion. The US administration will work instead to shore up European allies on the front lines with Russia. Regardless of the participants' secondary motives, an intensified military campaign against the Islamic State will surely damage the militant group's core. However, the fledgling caliphate will not be eradicated this year. A lack of reliable ground forces will hamper the anti-Islamic State campaign. And the more the Islamic State's conventional capabilities weaken, the more actively the group and its affiliates will try to conduct terrorist attacks outside the Middle East to maintain its relevance. This in turn will drive competition within the jihadist landscape as al Qaeda factions in the Arabian Peninsula, the Maghreb, West Africa and South Asia try to keep pace. The jihadist threat will fuel Islamophobia in the West and catalyze the fragmentation of Europe. Border controls and calls for preserving national identity will dilute the EU principle of allowing free movement of people. Closed borders will create a bottleneck of migrants in the Western Balkans, a region already rife with ethnic and religious tension. But the main story in Europe for 2016 will center on France and Germany, the two pillars of the European Union. Both will be preparing for 2017 elections, and both are leaning in a more nationalist and Euroskeptic direction. Over time, Germany will become more outspoken and much less willing to compromise on matters of EU integration. The continuation of quantitative easing and another year of low oil prices will have a palliative effect on the deeper frictions in Europe as global commodity markets continue to suffer. The addition of Iranian oil to the market in the first half of the year will offset a drop in US production. Any change to Saudi Arabia's oil output would come later in the year, after Riyadh has assessed the price impact from Iran's return as well as the effect on US shale producers. Any attempt by Riyadh to coordinate a drop in production with Kuwait and the United Arab Emirates would come only after this assessment. Regardless of Iran's impact, Saudi Arabia will still be prepared to take on more debt and draw down reserves to cope with low oil prices. China will not bring about relief in commodity prices, either. Consumption growth will slacken as Beijing struggles to implement reforms amid growing dissent among the Party elite. Even as Beijing faces the threat of party factionalization, it will still have enough economic heft to offer incentives to Southeast Asian states to counterbalance a stronger US security presence in the region. Low commodity prices and rising US interest rates, which affect currencies, will also spell another difficult year for much of Latin America. The threat of impeachment will hang over Brazilian President Dilma Rousseff and further sour the investment climate in Brazil in the short term. Argentina may have a new, reform-minded president, but his struggle with high inflation and foreign currency shortages means any moves to settle debt and to raise protectionist measures will be limited. In Venezuela, the end of Chavismo is near. An embattled United Socialist Party of Venezuela will eventually splinter under growing political and economic pressure, and the country risks defaulting on its foreign debt this year. The defining events of 2016 will raise apprehension around the world, leading into what will likely be an even more tumultuous 2017 as an array of developing conflicts comes into sharper focus. The essential thing to bear in mind is just how interconnected these trends are. The US-Russia standoff, surging nationalism in Europe, Turkey's reemergence and other geopolitical currents will tie in to and feed off of one another. We will keep our eyes fixed on the bigger picture in 2016, for there is a much more complex one developing in 2017. STRATFOR'S KEY TRENDS FOR 2016 (CLICK HERE TO READ THE FULL REPORT): THE ISLAMIC STATE WEAKENS AP Photo The Islamic State’s conventional capabilities and territorial control will weaken as military operations intensify in Syria and Iraq. This does not portend a reduced threat in terrorism, however. On the contrary, the Islamic State will encourage more grassroots attacks against soft targets beyond the Middle East, including in the West. _Read more on STRATFOR's forecast on the Middle East and North Africa»_ NATIONALISM IN THE EU REUTERS/Laszlo Balogh An extension of quantitative easing against a backdrop of low oil prices will enable the eurozone to buy another year of relative financial calm, but much deeper problems are brewing beneath the surface. Migrant and economic pressures will fuel nationalism and further fragment the Continent. Germany and France will move further apart in the lead-up to 2017 elections. Spending in the periphery will rise as Italy’s banking sector comes under more strain and as Greece struggles to cope with rising social unrest. _Read more on STRATFOR's forecast on Europe»_ CHEAP COMMODITIES REUTERS/Jim Urquhart Slackening consumption in China, a strengthening dollar and gluts in oil, metals and agricultural products means commodity prices are unlikely to see a significant recovery in 2016. The first half of the year will be particularly stressful for oil producers as Iranian crude re-enters an oversupplied market. Saudi Arabia will wait until the second half of 2016 to assess the price impact from Iran and structural damage to U.S. shale producers before deciding whether to cut output, but Riyadh is also prepared to draw down reserves and take on additional debt to weather low oil prices. SEE THE REST OF THE STORY AT BUSINESS INSIDER
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