Global Risk Indexes (12-02-2025)

Global 97 (-1 ▼)
MENA 98 ( —)
APAC 96 (-2 ▼)
Europe 97 ( —)
Africa 97 ( —)
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 Displacement Plan Faces Fierce Resistance, Netanyahu Prepares for Renewed War, and Iran Warns of U.S. Confrontation

The Middle East is entering a dangerous new phase as diplomatic and military tensions escalate on multiple fronts. U.S. President Donald Trump has escalated his push for a Gaza displacement plan, insisting that Jordan and Egypt will ultimately accept resettled Palestinians despite fierce opposition from both governments. In response, Egypt has formally rejected the plan and instead proposed a 'comprehensive strategy' to rebuild Gaza while keeping its population in place. Meanwhile, Israeli Prime Minister Benjamin Netanyahu has declared that the ceasefire will end by Saturday if Hamas does not return all remaining hostages, making a renewed Israeli military campaign in Gaza highly likely. Iran has lodged a formal complaint at the United Nations, warning of 'severe consequences' for any U.S. aggression, as Tehran's economic crisis deepens with the continued collapse of the rial. Saudi Arabia has reduced oil shipments to China for the second straight month, signaling a shift in Riyadh's energy diplomacy. At the same time, Turkey has intensified its crackdown on the opposition, Yemen's Houthis have escalated hostilities with the international community, and Sudan's civil war continues as the military rejects a UAE-backed peace initiative. With multiple crisis points intensifying simultaneously, the risk of regional instability is reaching a critical level.

Trump's Gaza Displacement Plan: Diplomatic Confrontation Intensifies

Trump's assertion that Jordan and Egypt will eventually accept Palestinian refugees has further alienated Washington's key Arab allies. Egypt has forcefully rejected the plan and instead proposed a strategy to rebuild Gaza, reinforcing its position that Palestinians must remain on their land. Jordan's King Abdullah, currently in Washington, has also warned that any forced displacement of Palestinians would be a direct threat to regional stability. If Trump continues to push this policy, it could result in a full-scale diplomatic crisis between the U.S. and its traditional Arab partners, while further emboldening Iran's position as the leading force of Palestinian resistance.

Israel's Ceasefire Deadline: The Countdown to Renewed Conflict

Netanyahu's declaration that the ceasefire will end by Saturday unless Hamas releases all hostages has significantly increased the likelihood of a full-scale Israeli military operation in Gaza. Hamas, in response, has warned that any Israeli escalation will trigger a broader regional conflict, with the Houthis in Yemen signaling readiness to join the fight. The situation is further complicated by Trump's unwavering support for Netanyahu, which could push Israel toward a more aggressive military posture. If war resumes, the conflict could draw in multiple regional actors, increasing the risk of escalation beyond Gaza.

Iran's Diplomatic and Economic Challenges

As Iran faces increasing economic difficulties, it has taken a more aggressive diplomatic stance by filing a formal complaint at the U.N. over Trump's 'reckless and inflammatory statements.' At the same time, the continued collapse of the Iranian rial has increased internal discontent, with growing anti-government sentiment both domestically and among the Iranian diaspora. Tehran's hardline stance against the U.S. suggests it is preparing for a long-term confrontation, potentially escalating its support for proxy forces in Iraq, Syria, and Yemen as a form of strategic counterbalance.

Saudi Arabia's Energy Strategy: A Shift in Market Dynamics

Saudi Arabia's decision to reduce oil shipments to China for the second consecutive month signals a strategic adjustment in response to shifting energy market dynamics. With oil prices rising and demand patterns changing, Riyadh appears to be recalibrating its export strategy to maintain market stability while optimizing revenues. This move could have significant implications for global energy markets, particularly as geopolitical tensions continue to disrupt supply chains.

Regional Instability: Turkey's Crackdown, Houthi Escalation, and Sudan's Rejection of Peace Talks

Turkey has arrested nine opposition officials as President Erdogan continues his crackdown on political opponents, signaling further centralization of power. In Yemen, the Houthis have escalated hostilities by killing a detained U.N. employee, drawing international condemnation. Meanwhile, Sudan's military government has rejected a UAE-backed peace summit, ensuring that the country remains locked in internal conflict. These developments highlight the growing fragmentation of regional diplomacy and the rising potential for broader instability.

Strategic Outlook

The Middle East is heading toward a period of severe instability, with multiple crises converging. Trump's Gaza displacement plan has set off a diplomatic firestorm, with Egypt and Jordan firmly rejecting any forced Palestinian resettlement. Netanyahu's warning that the ceasefire will end by Saturday makes a renewed Israeli military operation in Gaza increasingly likely. Iran's economic struggles and diplomatic offensives indicate Tehran is preparing for a prolonged confrontation with Washington. Meanwhile, Saudi Arabia's shifting energy policies, Erdogan's political crackdown, and the worsening situations in Yemen and Sudan further contribute to regional volatility. The coming days will be crucial in determining whether these tensions escalate into broader conflicts.

Geopolitical Risk Assessment for the Middle East
(12-02-2025)

The MENA region is facing a sharp escalation in diplomatic and military tensions, with multiple crises converging. Trump has doubled down on his Gaza displacement plan, asserting that Jordan and Egypt will eventually comply, despite firm opposition from both countries. Egypt has formally rejected the plan and presented an alternative strategy to rebuild Gaza while keeping Palestinians on their land. Meanwhile, Netanyahu has set a Saturday deadline for Hamas to return all hostages or face a renewed Israeli military offensive, increasing the likelihood of a full-scale war. Iran has responded to recent U.S. rhetoric by filing a complaint at the U.N. and warning of 'severe consequences' if American aggression continues, while its currency collapse worsens economic instability. Saudi Arabia has reduced oil shipments to China for the second consecutive month, signaling shifting energy market strategies. Turkey continues its political crackdown, arresting nine opposition officials as Erdogan consolidates power. Yemen's Houthis have escalated hostilities by killing a detained U.N. employee, further straining relations with the international community. Sudan's military government has rejected a UAE-backed peace summit, keeping the country locked in internal strife. With regional diplomacy faltering and the risk of war rising in multiple theaters, the MENA region is on the brink of a period of extreme volatility.

Geopolitical Risk Index

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

Previous Briefings

See all previous briefings