Global Risk Indexes (23-02-2025)

Global 99 (0 —)
MENA 99 ( —)
APAC 98 ( —)
Europe 99 ( —)
Africa 98 ( —)
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

Middle East on the Edge: Gaza Ceasefire in Crisis, Lebanon Tensions Escalate, and U.S.-Iran Showdown Intensifies

The past week has seen an unprecedented escalation of conflicts and geopolitical maneuvering across the Middle East. The Gaza ceasefire, once seen as a fragile but possible stepping stone to stability, is now at a breaking point. The West Bank has become an increasingly active conflict zone, with Israeli military operations intensifying following Hamas’ controversial hostage handover. Hezbollah’s defiance in Lebanon, coupled with continued Israeli airstrikes, raises the risk of a new front opening along the border. Meanwhile, the rejection of Trump’s Gaza displacement plan by Arab states has exposed regional diplomatic divisions. Iraq is now a battleground for U.S. and Iranian influence, as Washington pressures Baghdad to restart Kurdish oil exports, directly challenging Tehran’s economic interests. Syria’s new leadership has reached out to China, signaling a possible realignment in regional alliances. With these overlapping crises, the Middle East is at its most unstable point in years.

Gaza Ceasefire on the Brink of Collapse

The already fragile truce in Gaza has been severely shaken by Hamas’ mismanagement of hostage handovers, which sparked Israeli outrage. In response, Netanyahu has ordered further military operations in the West Bank, further straining negotiations. As hostilities in Gaza and the West Bank escalate, the risk of a full-scale military re-engagement between Israel and Hamas grows by the day.

Hezbollah’s Defiance and Lebanon’s Fragile Security

Despite Israel’s claims of withdrawing from Lebanon, Hezbollah has rejected the move as incomplete, calling for a full retreat. The recent Israeli drone strike targeting a Hezbollah operative has further inflamed tensions. With both sides unwilling to de-escalate, the possibility of renewed hostilities along the Israel-Lebanon border remains high.

U.S. vs. Iran: The Battle Over Iraq’s Oil

The U.S. is exerting heavy pressure on Iraq to resume Kurdish oil exports, a move that is directly tied to Trump’s renewed ‘maximum pressure’ campaign on Iran. If Baghdad complies, Tehran is likely to retaliate through its network of militias in Iraq and Syria. This development places Iraq at the center of a renewed U.S.-Iran confrontation, with significant implications for regional energy markets and security.

Trump’s Gaza Plan Collapses Amid Arab Resistance

Despite Trump’s efforts, Arab states have unanimously rejected his plan to displace Palestinians and turn Gaza into a U.S.-controlled economic zone. However, internal divisions have prevented regional powers from presenting a unified alternative. With an emergency Arab League meeting set for March 4, the coming weeks will be crucial in determining whether Arab states can counterbalance U.S. and Israeli policies in the region.

Syria’s Islamist-Led Government and China’s Calculations

The newly formed government in Syria, which emerged after the collapse of Assad’s rule, has begun diplomatic engagement with China. Beijing’s willingness to interact with the new leadership suggests it is exploring ways to maintain its influence in Syria while ensuring that extremist factions do not threaten its own internal security, particularly with Uyghur fighters among Syria’s new leadership.

Economic Pressures Mount Amid Political Instability

Israel’s economy is experiencing rising inflation and increasing sovereign risk, while Gulf economies remain cautious amid Trump’s aggressive tariff policies. Saudi Arabia and the UAE continue to push forward with major investment initiatives, but global economic uncertainty is weighing on regional markets. The future of Iraq’s oil exports, a key geopolitical issue, remains uncertain as Baghdad weighs U.S. pressure against Iranian influence.

Strategic Outlook

The Middle East is now at a tipping point. The Gaza ceasefire is barely holding, Hezbollah’s defiance in Lebanon could trigger a new war, and Iraq is being pulled into a U.S.-Iran energy confrontation. Meanwhile, the Arab world remains diplomatically fragmented in response to Trump’s policies, reducing its ability to influence regional outcomes. Syria’s engagement with China adds a new dimension to the geopolitical landscape, while economic pressures across Israel, Iraq, and the Gulf continue to shape strategic calculations. The next week will be decisive in determining whether these crises spiral further into war or if diplomatic efforts can slow the march toward wider conflict.

Geopolitical Risk Assessment for the Middle East
(23-02-2025)

The Middle East has entered a critical period of geopolitical instability, with multiple crises converging into a highly volatile situation. The Gaza ceasefire is now at extreme risk, as Hamas’ controversial hostage handover and escalating Israeli military operations in the West Bank fuel rising tensions. Hezbollah’s rejection of Israel’s withdrawal from Lebanon and continued border confrontations signal the possibility of a new conflict. Meanwhile, Iraq is under intense U.S. pressure to resume Kurdish oil exports, increasing frictions with Iran. Trump’s Gaza displacement plan has faced unanimous Arab rejection, but regional powers remain divided on an alternative, weakening diplomatic coordination. Syria’s new Islamist-led government is engaging with China for the first time, marking a potential shift in alliances. With economic pressures rising across the region, Iran continuing its nuclear defiance, and U.S.-Russia talks in Riyadh adding another layer of complexity, the potential for regional conflict is dangerously high.

Geopolitical Risk Index

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

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