Global Risk Indexes (08-02-2025)

Global 97 (-1 ▼)
MENA 98 ( —)
APAC 97 ( —)
Europe 97 ( —)
Africa 96 ( —)
AMERs 98 ( —)
Markets 98 (-1 ▼)
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 Sparks Global Crisis, Iran Ramps Up Support for Hamas, and U.S. Arms Sales Fuel MENA Escalation

The Middle East is at a critical juncture, with major diplomatic, military, and economic confrontations unfolding simultaneously. U.S. President Donald Trump's controversial Gaza takeover proposal has ignited widespread condemnation, with Arab nations firmly rejecting any forced displacement of Palestinians. Egypt, Jordan, and Saudi Arabia have united in opposition, warning that such a plan would violate international law and destabilize the region. At the same time, the fragile Israel-Hamas ceasefire is showing signs of collapse, as Hamas delays hostage releases and accuses Israel of obstructing humanitarian aid deliveries. Iran is capitalizing on the crisis by strengthening its support for Hamas, with Supreme Leader Ayatollah Ali Khamenei declaring that Israel's failures in Gaza mark a 'victory for the resistance.' Meanwhile, the U.S. has approved a massive $7.4 billion arms package for Israel, a move that could further escalate the conflict in Gaza and Lebanon. In Lebanon, the newly formed government under Prime Minister Nawaf Salam signals a shift in power dynamics, with Washington playing a key role in limiting Hezbollah's influence. On the economic front, Iran and OPEC members are strategizing a response to new U.S. oil sanctions, potentially leading to disruptions in global energy markets. Meanwhile, the UAE and France have finalized a $50 billion AI data center deal, positioning MENA as a rising player in the global technology race.

Trump's Gaza Takeover Plan: Arab Rejection and the Risk of Regional Unrest

Trump's proposal to take control of Gaza and forcibly relocate its Palestinian population has been met with global outrage. Jordanian King Abdullah has called it an 'existential threat,' with reports indicating that Amman is exploring drastic countermeasures, including potential withdrawal from its 1994 peace treaty with Israel. Egypt has also intensified diplomatic efforts to rally Arab opposition, warning that any attempt to expel Palestinians would be considered an act of aggression. Saudi Arabia has reaffirmed that normalization with Israel is impossible without a Palestinian state, firmly rejecting Trump's narrative that Riyadh no longer demands Palestinian statehood as a precondition. The crisis is reshaping diplomatic alliances, with the U.S. now facing significant pushback from traditional Arab partners. If Trump persists with his plan, the likelihood of regional instability, mass protests, and even a new wave of radicalization will increase dramatically.

Iran's Strategic Shift: Strengthening Hamas and Challenging U.S. Sanctions

As tensions escalate in Gaza, Iran is deepening its military and economic engagement with Hamas. Supreme Leader Ayatollah Khamenei hosted senior Hamas officials in Tehran, publicly praising their 'resistance' and vowing continued support. Iran's financial backing for Hamas is expected to increase, with reports indicating that Tehran is supplying advanced missile technology to the group. At the same time, Iran is preparing to counter new U.S. sanctions on its oil exports by rallying OPEC members, particularly Venezuela and Russia, to circumvent American restrictions. This economic maneuvering could lead to an oil price surge, putting additional pressure on Western economies. If the U.S. continues to tighten its sanctions, Iran may retaliate by disrupting Gulf shipping routes or escalating proxy attacks against American interests in Iraq and Syria.

Israel-Hamas Ceasefire at Risk: Fragile Diplomacy on the Brink

The ceasefire between Israel and Hamas is facing growing challenges, with Hamas delaying hostage releases and accusing Israel of obstructing aid deliveries. While 16 Israeli hostages have been freed under the deal, Hamas claims that Israel has not honored its commitment to allow sufficient humanitarian supplies into Gaza. These disputes highlight the deep mistrust between the parties and the fragile nature of the agreement. Meanwhile, Israel's leadership is under domestic pressure, with far-right ministers opposing further prisoner exchanges and calling for renewed military operations. If negotiations on the second phase of the truce collapse, the risk of a full-scale Israeli military campaign in Gaza will increase, potentially drawing in Hezbollah and other regional actors.

Lebanon's New Government: U.S. Intervention Limits Hezbollah's Influence

Lebanon has formed a new government under Prime Minister Nawaf Salam, marking a major shift in the country's political landscape. The U.S. played a direct role in ensuring that Hezbollah does not hold a controlling influence in the new cabinet, setting a 'red line' against its participation. This intervention has sparked protests in Beirut, with Hezbollah supporters accusing Washington of interfering in Lebanon's sovereignty. The new government is expected to prioritize financial reforms and reconstruction, with the aim of securing international aid. However, Hezbollah's exclusion from key decision-making positions raises the risk of renewed political gridlock, as the group and its allies still wield significant influence in Lebanon's parliament. If tensions escalate, the country could face another period of political paralysis, further delaying much-needed economic recovery.

Strategic Outlook

The Middle East is entering a volatile phase, with escalating conflicts, diplomatic crises, and economic warfare unfolding simultaneously. Trump's Gaza proposal has ignited fierce opposition, with Arab states and global powers warning of severe consequences if the plan moves forward. Iran's growing support for Hamas and its coordination with OPEC members suggest that Tehran is preparing for a long-term confrontation with the U.S. The fragility of the Israel-Hamas ceasefire raises the risk of renewed military escalation, while Lebanon's new government faces internal and external challenges in maintaining stability. Meanwhile, economic developments'such as the UAE-France AI deal and Iran's oil maneuvering'highlight shifting power dynamics in global markets. The coming weeks will be critical in determining whether diplomacy can prevent further escalation or whether the region is heading toward prolonged instability.

Geopolitical Risk Assessment for the Middle East
(08-02-2025)

The MENA region is experiencing intense geopolitical turbulence, with escalating tensions across multiple fronts. Trump's Gaza takeover proposal has triggered a fierce diplomatic backlash, as Arab states, led by Egypt, Jordan, and Saudi Arabia, reject any forced Palestinian displacement. The fragile Israel-Hamas ceasefire faces mounting obstacles, with Hamas delaying hostage releases and accusing Israel of blocking humanitarian aid. Meanwhile, Iran is deepening its military and financial support for Hamas, while Supreme Leader Khamenei hails the resistance's 'victory' over Israel. In parallel, the U.S. has approved a massive $7.4 billion arms package for Israel, raising the likelihood of prolonged military escalation in Gaza and Lebanon. Lebanon has formed a new government after direct U.S. intervention to limit Hezbollah's influence, sparking protests in Beirut. In the energy sector, Iran and OPEC members are coordinating a response to U.S. sanctions on Iranian oil, potentially triggering new oil market disruptions. The UAE and France's $50 billion AI data center deal underscores MENA's growing role in global technology investment. With the ceasefire at risk, rising military tensions, and economic warfare looming, the region is on the verge of a dangerous escalation.

Geopolitical Risk Index

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

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