Geopolitics and Business Report, Oct. 26, 2026: Brazil Real Plunges, Gulf Talks in Tehran

Economic Warfare & Trade Policy › Energy & commodities

Good evening. This is your geopolitics and business report for Monday, October 26, 2026. Tonight, an election in Brazil shook global investors, Gulf diplomacy in Tehran tried to cool a war that keeps squeezing energy markets, a fight over Elon Musk’s satellites turned into a business case for Europe, and Washington reopened its legal battle with offshore wind projects, including one planned off the Massachusetts coast.

Brazil’s Election Jolts Emerging Markets

We start in Brazil, where Luiz Inácio Lula da Silva won an unprecedented fourth term on Sunday. The Superior Electoral Court counted 51.8% of valid votes for Lula and 48.2% for Senator Flávio Bolsonaro, according to CNBC. It is the first time since Brazil returned to direct elections in 1989 that a candidate lost the first round and still won the runoff. Our news desk has more on how Lula beat Flávio Bolsonaro in the runoff.

Markets had been betting the other way, and the reversal was violent. The Financial Times reported that the real fell as much as 11.8% at Monday’s open, to 5.64 per U.S. dollar from 4.98 on Friday, its sharpest drop since 1999. The iShares MSCI Brazil fund was down 25% by mid-morning in New York, and trading on Brazil’s own stock exchange was halted by an automatic circuit breaker. Among U.S.-listed names, Petrobras slid 16% and Itaú Unibanco lost 20%, CNBC said.

The worry is the budget. The FT noted that the International Monetary Fund projects a deficit of about 8% of GDP this year, public debt near 83% of GDP, and a central bank policy rate of 13.75%. Brazil’s Treasury canceled bond auctions set for October 27 and October 29, saying it would monitor conditions and act to keep the government bond market working. “The fiscal side has always been Brazil’s Achilles heel,” said Chris Turner, head of EMEA and Latam research at ING.

The American Prospect read the result very differently. Robert Kuttner called it a huge win for the left, crediting higher turnout in Lula strongholds such as the northeast and the big-city favelas for a swing of about eight million votes. The Economist, for its part, ran a leader under the headline “Markets are dismayed by Lula’s surprise win, and for good reason.” One more risk to watch: Bolsonaro refused to concede and said he would seek to annul the result, Reuters reported, as cited by CNBC.

Gulf Diplomacy in Tehran and the Energy Risk

Next, the Middle East. Saudi Defense Minister Prince Khalid bin Salman met Iranian President Masoud Pezeshkian in Tehran on Monday, joined by Pakistan’s army chief, Field Marshal Asim Munir, and Turkish intelligence chief Ibrahim Kalin. The FT said it was the first time the members of the Mecca mutual defense pact, signed in August, have met Iran as a group. We covered that Mecca pact meeting in Tehran earlier today.

The business stakes are real. Mediators are trying to build on a seven-day plan Iran presented at the United Nations last month, under which shipping could move through the Strait of Hormuz if the U.S. lifts its blockade of Iranian ports and frees some Iranian assets held abroad, the FT reported. The two sides remain stuck on sequencing and on Iran’s 440-kilogram stockpile of highly enriched uranium. Meanwhile, Houthi forces in Yemen said they fired missiles at Riyadh’s international airport and launched drones at oil pumping stations !Unverified claim, Houthi military statement (Houthi); CNBC noted the Saudis had not confirmed those strikes. Saudi Arabia has already pushed its flagship Future Investment Initiative conference to 2027.

Michael Alfaro, chief investment officer at Gallo Partners, told CNBC that “the real challenge is refining capacity,” warning that damage there could become a structural problem lasting into 2027 and beyond. Saudi Arabia is hedging its Asian supply chain: it plans to begin storing crude in Singapore in the second half of 2027, according to energy ministers from both countries. President Trump, in a Fox News interview on Sunday, framed his own choice bluntly: “Do I finish it off, which would be very easy to do, or do I make a deal? It’s getting to be decision time.”

Starlink and Europe’s Search for Satellite Independence

A dispute over satellite internet is now a story about industrial strategy. Musk said on X that Ukraine’s military violated Starlink’s terms by using it for offensive drone strikes. Serhii Beskrestnov, a defense technology adviser to President Volodymyr Zelenskyy, answered that Starlink’s civilian service does not work over Russian territory and that Ukrainian drones using it have been capped at 70 to 90 kilometers per hour, making such strikes “PHYSICALLY IMPOSSIBLE,” CNBC reported. Ukraine said high-speed service was restored on Saturday. Here is our earlier report on Musk’s Starlink claim and Ukraine’s response.

Follow the money. Starlink brought in $5.25 billion in third-quarter revenue, up from $3.1 billion a year earlier, with $2.13 billion from government and enterprise customers. Ukraine signed a letter of intent with Nokia and satellite maker ICEYE on October 22 to develop alternatives. But FT trade columnist Alan Beattie wrote that the European Union’s rival constellation, IRIS², is more expensive, short of launch capacity and split among companies and countries, and CNBC said its first launches are not expected until 2029.

War Money and Gulf Capital

Conflict is also reshaping private markets. PitchBook data cited by CNBC show private equity growth investment in defense hit $4 billion in the first nine months of 2026, up from $500 million in 2024. Shonnel Malani of Advent International, which pledged up to $1 billion to defense technology in March, warned of “a lot of froth in the system.” In Abu Dhabi, Apollo Global Management was finalizing a deal for nearly 10% of Mubadala Capital, which says it manages, advises and administers more than $755 billion, according to people familiar with the matter who spoke to CNBC.

The Massachusetts Angle: Offshore Wind Back in Court

Finally, closer to home. The FT reported that the Justice Department asked courts to reconsider federal approvals for three offshore wind farms, including Avangrid’s New England Wind off Massachusetts, filed on October 20. One of the lawsuits was brought by the Nantucket group ACK for Whales. Neither New England Wind nor Maryland’s project has started construction. “It’s hard to see this as anything but negative for the bill,” said John Miller of TD Cowen, referring to a bipartisan permitting bill introduced in late September. A White House official said the government was responding to court deadlines in lawsuits that date back to the Biden administration.

That is the geopolitics and business report for tonight. Thanks for listening, and we will see you tomorrow.

Sources

• CNBC: Brazilian stocks rocked as Lula wins presidential election
• Financial Times: Brazil’s currency plunges most since 1999 after Lula’s surprise victory
• The American Prospect: Lula’s Huge Win for the Left
• The Economist: Markets are dismayed by Lula’s surprise win, and for good reason
• Financial Times: Iran hosts regional powers for talks to prevent fresh escalation
• CNBC: Oil ticks lower as Saudi defense minister meets with Iran’s president in Tehran
• CNBC: Trump says he’ll soon decide whether to make a deal with Iran or finish it off
• CNBC: Ukraine disputes Elon Musk’s claim that its military violated Starlink terms
• Financial Times: Relieving Starlink’s chokehold takes more than good intentions
• CNBC: Private equity pours billions into defense tech as investors debate a bubble
• CNBC: Apollo to buy nearly 10% stake in Mubadala Capital
• Financial Times: Trump’s fresh campaign against wind power puts permitting deal in doubt