Farid al-Khaleqi

Navigating the Sands of Time, Illuminating the Geopolitical Horizon

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MENA in 2025: Rising Tensions, Syrian Transitions, and Gulf Economic Realignments

The Middle East begins 2025 amidst ongoing conflict and political recalibration. Israel's military operations, Syria's transitional administration efforts, and shifting economic policies in the Gulf reflect a region in flux, with far-reaching implications for global stability.

Israel's intensifying military operations continue to dominate regional dynamics. Strikes in northern Gaza and Shejaia killed dozens, including at least eight civilians, as the humanitarian crisis worsens. The displacement of over 100,000 Gazans, compounded by widespread destruction and heavy rains, highlights the acute human cost of the prolonged conflict. Meanwhile, in Yemen, U.S. military strikes targeted Houthi facilities following missile attacks on Israeli targets, signaling increased U.S.-Israel alignment in countering Iranian proxies. These developments risk escalating proxy conflicts across the region, particularly as Israel broadens its military scope against Iranian-aligned forces.

Syria's transitional government, under Ahmed al-Sharaa, continues to navigate the complexities of rebuilding governance and societal cohesion. Appointments of foreign fighters to senior military roles have raised alarm among international stakeholders concerned about the long-term implications of these decisions. Simultaneously, property evictions of Assad-era military families highlight the transitional administration's struggle to manage legacy issues while accommodating victorious rebel factions. The visit of Syrian officials to Riyadh signals a thaw in relations with Gulf states, yet questions about Syria's inclusivity and stability remain unresolved.

Turkey's approach to Kurdish dynamics reflects its balancing act between domestic pressures and regional ambitions. Recent U.S.-mediated ceasefires around Manbij underscore efforts to de-escalate tensions with the Kurdish-led SDF, but Ankara's military operations and economic policies reveal a continued hardline stance. Turkey's imposition of a 10% fuel tax amidst inflation highlights the intersection of domestic economic challenges and broader regional strategies aimed at stabilizing its southeastern provinces and consolidating influence in northern Syria.

Economic realignments in the Gulf present a mixed picture of resilience and challenges. Saudi Arabia's sovereign wealth fund, PIF, has shifted focus to domestic investments, losing its position as the most active global sovereign investor. In contrast, Abu Dhabi's Mubadala Investment Company has ramped up international spending, signaling a competitive push to assert economic leadership. Meanwhile, rising oil prices, driven by China's manufacturing recovery, offer short-term relief but underline the region's dependency on external economic trends. Oman's adoption of the OECD's minimum tax for multinational enterprises reflects an alignment with global fiscal standards, aiming to attract and retain foreign investment.

Strategic implications: The interconnected crises across Gaza, Syria, and the Gulf require coordinated international interventions to mitigate escalation risks and foster stability. Israel's military actions risk deepening proxy conflicts, Syria's governance struggles highlight the complexities of post-conflict transitions, and Gulf economic shifts reflect the region's ongoing adaptation to global challenges. Without sustained diplomatic engagement, the risk of prolonged instability and fragmentation remains significant.

Geopolitical Risk Assessment for the Middle East
(01-01-2025)

The MENA region remains a focal point of geopolitical tension with Israel's continued military campaigns, Syria's transitional government balancing inclusivity with governance challenges, and economic and political shifts across the Gulf. These dynamics underscore the intricate interplay of regional conflicts, external interventions, and internal political transformations.

Geopolitical Risk Index