Global Risk Indexes (07-02-2025)

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

Farid al-Khaleqi

Navigating the Sands of Time, Illuminating the Geopolitical Horizon

Trump's Gaza Plan Ignites Global Crisis, Iran Escalates Military and Economic Retaliation, and Israel-Hezbollah Tensions Boil Over

The Middle East is facing one of its most turbulent periods in decades, as high-stakes geopolitical maneuvers unfold across the region. U.S. President Donald Trump's radical Gaza takeover proposal has ignited a diplomatic firestorm, with Arab states and major global powers rejecting the idea as a violation of international law. Jordan, in particular, sees the plan as an existential threat and is preparing drastic countermeasures, including potential withdrawal from its peace treaty with Israel. Meanwhile, Iran is accelerating its economic and military retaliation against Washington's renewed sanctions, rallying OPEC members to defy U.S. pressure while expanding its naval presence with a new drone and helicopter carrier. In Iraq, Turkey has intensified its airstrikes against the PKK ahead of a possible announcement by Abdullah Ocalan, aiming to weaken Kurdish forces before potential peace negotiations. In Lebanon, Israeli airstrikes on Hezbollah positions mark a new phase of escalation, while U.S. officials are pressuring Beirut to form a government free of Hezbollah's influence, risking further instability in the country. At the same time, economic shifts in the region'such as Egypt's deepening energy crisis and the UAE's $50 billion AI investment in France'underscore how economic power struggles are reshaping MENA's geopolitical landscape.

Trump's Gaza Takeover Proposal: An Existential Threat to Jordan and a Global Diplomatic Crisis

Trump's proposal to take over Gaza and forcibly resettle Palestinians has triggered global outrage, with Jordan emerging as the most vocal opponent. King Abdullah sees the plan as a direct threat to Jordan's national identity and stability, fearing it could pave the way for a mass expulsion of Palestinians from the West Bank. Jordanian officials are reportedly considering extreme countermeasures, including the possibility of abrogating the 1994 peace treaty with Israel. This crisis has also drawn sharp rebukes from China, Russia, and the European Union, which argue that forced displacement is a violation of international law. The Palestinian leadership has categorically rejected the plan, seeing it as a modern-day Nakba. If Trump pushes forward, it could lead to a full-scale diplomatic rupture between Washington and key Arab states, while also strengthening Iran's influence as the self-proclaimed defender of Palestinian rights.

Iran's Military and Economic Retaliation: A Two-Front Confrontation

Iran is escalating its response to renewed U.S. sanctions with a two-pronged approach: economic defiance and military expansion. On the economic front, Tehran is mobilizing OPEC members to resist U.S. pressure, seeking to undermine Washington's ability to isolate its oil exports. Iranian President Masoud Pezeshkian has publicly called for an oil alliance to counteract American sanctions, a move that could lead to a standoff between OPEC and the U.S. On the military front, Iran has unveiled a new drone and helicopter carrier warship, signaling its intent to expand naval power projection. This development raises concerns over Iran's ability to disrupt Gulf shipping lanes, particularly in the Strait of Hormuz. The combination of economic and military pressure could escalate tensions in the Gulf, increasing the risk of direct U.S.-Iranian confrontations.

Turkey's Intensifying Campaign Against the PKK: Preempting a Kurdish Shift?

Turkey has ramped up its military operations against the PKK in northern Iraq, killing key members in targeted drone strikes. This escalation comes ahead of a possible 'historic announcement' by jailed PKK leader Abdullah Ocalan, which Turkish intelligence suspects could be a call for peace talks or a new shift in Kurdish strategy. By intensifying its attacks, Ankara aims to weaken the PKK's bargaining power before any potential negotiations. However, this strategy also risks provoking further Kurdish resistance and complicating relations with Iraq's Kurdish Regional Government (KRG), which has historically had a delicate relationship with both Ankara and the PKK. The outcome of these developments will have major implications for Kurdish movements across the region, particularly in Syria, where the U.S. still backs Kurdish forces that Turkey views as a direct threat.

Israel-Hezbollah Confrontation: A New Phase of Escalation?

Israeli airstrikes on Hezbollah weapons storage sites in Lebanon mark a significant escalation in the ongoing shadow war between the two forces. With tensions already at a breaking point, this latest move risks drawing Hezbollah into a more active conflict with Israel, potentially triggering a wider regional confrontation. Hezbollah has vowed to respond, and its next steps could include drone strikes on Israeli positions or rocket attacks into northern Israel. The situation is further complicated by the ongoing war crimes accusations against Israel at the International Criminal Court (ICC), which Trump has now vowed to sanction in retaliation. As Israeli-Lebanese tensions rise, the risk of miscalculation leading to full-scale war is increasing.

Strategic Outlook

The Middle East is now entering an extremely volatile phase, with heightened risks of diplomatic breakdowns, economic confrontations, and military escalations. Trump's Gaza proposal has set off a global crisis, with Jordan considering severe countermeasures. Iran's response to U.S. sanctions signals an emerging economic war, while its military expansion raises concerns about regional security. Turkey's aggressive campaign against the PKK could reshape Kurdish strategies, and the Israel-Hezbollah confrontation threatens to spill into a wider conflict. Meanwhile, economic developments'such as Egypt's energy struggles and the UAE-France AI investment'highlight the shifting balance of economic power in the region. The coming weeks will be crucial in determining whether diplomacy can contain these crises or whether MENA is heading toward multiple simultaneous conflicts.

Geopolitical Risk Assessment for the Middle East
(07-02-2025)

The MENA region is at a dangerous geopolitical crossroads, with escalating crises on multiple fronts. Trump's Gaza takeover proposal has triggered global condemnation, with Jordan viewing it as an existential threat and preparing drastic countermeasures. Iran is retaliating against new U.S. sanctions by expanding its military footprint and rallying OPEC members to challenge American pressure. Turkey is intensifying its campaign against the PKK in Iraq ahead of a possible historic declaration from Abdullah Ocalan. Israel's strikes on Hezbollah positions in Lebanon raise the specter of an expanded regional conflict. Meanwhile, the U.S. is pressuring Lebanon to sideline Hezbollah from government formation, heightening internal tensions. The UAE-France AI megadeal signals a major geopolitical shift in global tech leadership, while Egypt's economic crisis deepens amid falling gas production. With diplomacy faltering and hard power dominating regional affairs, the risks of conflict and economic shocks are increasing.

Geopolitical Risk Index

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

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