Global Risk Indexes (02-02-2025)

Global 98 (0 —)
MENA 96 ( —)
APAC 97 ( —)
Europe 99 ( —)
Africa 98 (+1 ▲)
AMERs 98 (+1 ▲)
Markets 99 ( —)
Farid al-Khaleqi, Middle East region analyst at Worldwise Analytica

Farid al-Khaleqi

Navigating the Sands of Time, Illuminating the Geopolitical Horizon

MENA's Volatile Week: Gaza's Uncertain Ceasefire, West Bank Uprising Risks, and Syria's Economic Collapse Define Regional Instability

The past week has exposed the fragile state of the MENA region, where ceasefires in Gaza and Lebanon remain under immense strain, Israel's West Bank operations risk igniting broader conflict, and Syria's economic collapse is reshaping regional alignments. These crises, coupled with maritime security threats in the Red Sea and the Gulf's economic recalibrations, highlight the complex geopolitical landscape.

In Gaza, the ceasefire remains fragile as negotiations continue under Egyptian and Qatari mediation. The prisoner exchanges, which saw Hamas release several Israeli hostages in exchange for Palestinian detainees, have kept talks alive but have not resolved deeper governance disputes. Israeli hardliners are pressuring Prime Minister Netanyahu to abandon negotiations and push for a full military defeat of Hamas, a move that would unravel diplomatic efforts. Meanwhile, humanitarian conditions in Gaza remain dire, with over 650,000 displaced residents struggling to return home amid infrastructure destruction, limited aid access, and growing public frustration. Any collapse of the ceasefire could trigger another cycle of violence, drawing in regional actors.

Israel's military expansion in the West Bank, particularly its entrenchment in Jenin, marks a dangerous escalation. Defense Minister Israel Katz has confirmed that Israeli forces will maintain an indefinite presence in the region, reinforcing fears of a long-term occupation strategy. The situation has deteriorated further following Israeli airstrikes that killed five Palestinians in Jenin, sparking calls for a new intifada. The Palestinian Authority's diminishing authority and the growing influence of militant groups suggest that an uprising could soon materialize, with consequences that extend beyond the West Bank.

Lebanon's political and economic crisis deepened this week as Israeli airstrikes in Nabatieh and Majdal Selm killed several Hezbollah fighters. Hezbollah's leadership has warned of imminent retaliation, raising the risk of a renewed conflict along the Israel-Lebanon border. Meanwhile, Lebanon's financial collapse continues to deter foreign investment. The UAE's Al Habtoor Group confirmed the cancellation of all planned projects in Beirut, signaling further economic isolation. The re-opening of the UAE's embassy in Lebanon reflects cautious diplomatic re-engagement but does little to address the country's governance paralysis.

In Syria, the transitional government under Ahmed al-Sharaa is struggling to stabilize the economy following Iran's decision to halt fuel shipments. With no immediate alternatives, fuel shortages have crippled industries, and black-market prices have skyrocketed. The interim government's attempts to secure Saudi economic aid remain uncertain, as Riyadh weighs the risks of supporting a fragile administration. Meanwhile, Syria's decision to arrest Atef Najib, a former Assad-era security official, signals an attempt to distance itself from the previous regime. However, concerns persist over the government's Islamist leanings and the growing influence of Hayat Tahrir al-Sham (HTS), which could complicate international recognition.

Maritime security in the Red Sea remains a critical concern. The Houthis' unpredictable behavior, including their continued detention of U.N. personnel, underscores the broader risks of miscalculation. While the Suez Canal Authority has urged shipping giants to resume operations, most firms remain hesitant, preferring alternative routes through Africa. The continued disruption to global trade underscores the strategic importance of securing key waterways.

On the economic front, Saudi Arabia and the UAE continue to diversify their economies amid shifting global dynamics. Riyadh's decision to raise crude prices for Asian markets reflects both confidence in oil demand and its attempt to leverage geopolitical tensions. However, internal economic pressures remain, with Saudi Arabia forecasting a $27 billion fiscal deficit for 2025. The Gulf's ability to navigate economic uncertainties while maintaining regional influence will shape broader stability in the coming months.

Strategic Implications: The region remains in a precarious state where multiple crises intersect. Gaza's ceasefire is at risk, the West Bank is on the verge of a new uprising, and Lebanon's economic collapse could trigger wider instability. Syria's economic breakdown further complicates regional alignments, while maritime insecurity threatens global trade. Moving forward, diplomatic intervention and security coordination will be critical in preventing further escalation.

Geopolitical Risk Assessment for the Middle East
(02-02-2025)

The Middle East and North Africa (MENA) region remains highly volatile, with intensifying conflicts in the West Bank, Lebanon, and Syria, coupled with deepening economic crises and maritime security threats in the Red Sea. While diplomacy in Gaza offers short-term stability, proxy wars, shifting alliances, and internal power struggles sustain long-term uncertainty.

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