Global Risk Indexes (10-03-2025)

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

Farid al-Khaleqi

Navigating the Sands of Time, Illuminating the Geopolitical Horizon

Middle East on the Edge: Gaza War Fears, U.S.-Iran Showdown, and Red Sea Tensions Threaten Regional Stability

The Middle East is caught in an escalating cycle of conflict, diplomacy, and economic volatility. The ceasefire in Gaza remains precarious, with Hamas signaling cautious optimism over upcoming negotiations while Israel maintains its airstrikes and blockade. A recent Israeli drone strike in Rafah that killed two Palestinians underscores the fragility of the truce, and with Egypt mediating plans for a new Gaza administrative body, the future of post-war governance remains uncertain.

Meanwhile, U.S.-Iran tensions have entered a dangerous phase. Supreme Leader Ayatollah Khamenei has outright rejected Washington’s diplomatic overtures, accusing the U.S. of attempting to force Iran into submission under a ‘one-sided agreement.’ Trump has countered with escalated economic pressure, revoking Iraq’s ability to pay Iran for electricity imports—a direct financial blow to Tehran’s already struggling economy. With the White House also considering naval inspections of Iranian oil tankers, Tehran could retaliate, increasing the risk of maritime confrontations in the Gulf.

Yemen’s Houthis have issued an ultimatum, warning they will resume naval attacks on Israeli-linked shipping if humanitarian aid is not allowed into Gaza within four days. This escalation would further disrupt Red Sea shipping lanes, intensifying economic risks for global trade. Hamas has praised the Houthis’ stance, further solidifying the alignment between Iran-backed militant factions.

Syria, meanwhile, is witnessing one of its bloodiest periods in recent history. More than 1,000 people have been killed in the latest clashes between pro-Assad fighters and Syria’s new Islamist government. Reports of mass executions, sectarian revenge killings, and forced displacements have raised concerns that the country is spiraling into another prolonged civil conflict. The resurgence of Assad loyalists suggests that opposition to the new ruling authority is more entrenched than previously believed, raising the possibility of a drawn-out insurgency.

On the diplomatic front, the U.S. is shifting its global priorities. Washington has signaled that it may pressure Ukraine into peace negotiations with Russia, with Saudi Arabia hosting preliminary discussions. The move reflects Trump’s broader strategy of disengagement from prolonged foreign entanglements and could have wider geopolitical consequences, including the potential redirection of U.S. resources and policy focus away from the Middle East.

Economic instability is adding another layer of uncertainty. Brent crude prices have fallen to $70.05 per barrel as OPEC production increases and fears of slowing global demand weigh on markets. Saudi Aramco has cut its dividend payments by 30%, an unusual move for the oil giant, signaling financial pressures despite Riyadh’s diversification efforts. As global markets respond to geopolitical tensions and shifting trade policies, the Gulf’s economic trajectory remains uncertain.

Geopolitical Risk Assessment for the Middle East
(10-03-2025)

The Middle East is teetering on the edge of further instability as diplomatic tensions, military conflicts, and economic pressures converge. The fragile Gaza ceasefire faces imminent collapse, with Hamas and Israel preparing for talks while Tel Aviv maintains a blockade and continues airstrikes. U.S.-Iran relations have worsened, as Supreme Leader Khamenei rejects diplomacy while Washington ramps up its sanctions strategy, signaling a potential escalation. The Houthis have issued a four-day ultimatum to resume naval attacks unless Israel lifts restrictions on humanitarian aid to Gaza, raising serious risks for global shipping. In Syria, over 1,000 people have been killed in some of the worst sectarian clashes since the fall of Bashar al-Assad, exposing the deep fractures in the country's fragile political transition. Meanwhile, the U.S. is recalibrating its global priorities, pressuring Ukraine to consider a peace settlement with Russia in Saudi-brokered negotiations, a move that could shift the balance of power in the region. Economic uncertainty continues, with oil prices dropping further and Saudi Aramco cutting dividends as global energy markets react to OPEC+ production shifts. With multiple flashpoints and growing diplomatic uncertainty, the region remains at extreme risk of escalation.

Geopolitical Risk Index

Developments to Follow for the Middle East (See All Global)

Previous Briefings

See all previous briefings