Ethiopia and Eritrea have rapidly escalated toward direct confrontation following renewed fighting in northern Ethiopia's Tigray region that began in late September 2026. Ethiopia accuses Eritrean forces of crossing the border in support of Tigray People's Liberation Front rebels, advancing dozens of kilometers into Ethiopian territory, prompting Ethiopian drone strikes near Adigrat and troop advances toward border areas like Zalambessa. Both nations severed diplomatic ties in early October, exchanged formal accusations at the UN Security Council, and traded claims of aggression, with Ethiopia invoking self-defense rights and Eritrea alleging a long-planned Ethiopian push for Red Sea access. These military movements, mutual expulsions of diplomats, and fears of wider regional spillover now dominate trader assessments of the likelihood and timing of Ethiopia targeting Eritrean territory.