Global Risk Indexes (06-03-2025)

Global 97 (-1 ▼)
MENA 99 ( —)
APAC 97 (-1 ▼)
Europe 98 ( —)
Africa 95 (-1 ▼)
AMERs 96 (-1 ▼)
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

Middle East on Edge: Gaza Ceasefire Crisis, U.S.-Hamas Negotiations, and Red Sea Tensions Escalate

The Middle East is facing an escalating mix of security crises, diplomatic realignments, and economic volatility. The Gaza ceasefire is under severe strain as Israel swore in a new military commander, Lieutenant General Eyal Zamir, who has signaled a hardline stance against Hamas. Israeli forces have partially withdrawn from Gaza, but officials warn that military operations could resume if hostage negotiations fail. Hamas, in response, has accused U.S. President Donald Trump of pushing Israel to intensify the siege on Gaza.

Meanwhile, the United States has secretly engaged in direct talks with Hamas for the first time, breaking a longstanding diplomatic precedent. The White House has authorized U.S. hostage envoy Adam Boehler to negotiate directly with Hamas representatives in Doha, marking a shift from past policies that strictly avoided engaging with the group. At the same time, Trump has issued ultimatums to Hamas, warning of severe consequences if all hostages are not immediately released.

In the Red Sea, tensions have escalated following the U.S. designation of the Houthis as a foreign terrorist organization. The move raises concerns over maritime security, as the Houthis have previously threatened retaliatory attacks on shipping lanes. The new U.S. sanctions target individuals accused of smuggling weapons into Yemen, further heightening geopolitical risks.

On the security front, Jordanian forces have clashed with armed smugglers attempting to cross the border from Syria. The incident highlights the ongoing security crisis along the Jordan-Syria border, which remains a key route for arms and drug smuggling. Jordan has vowed to maintain strict border control measures.

Economically, oil prices have rebounded slightly after a multi-year low, but market sentiment remains fragile. The recovery was driven by technical adjustments following a sharp decline triggered by new U.S. tariffs on Canadian and Mexican energy imports. OPEC has increased oil output for the first time since 2022, contributing to market volatility. The combination of rising production, global trade disruptions, and declining demand continues to weigh on oil markets.

In the Gulf, financial markets have struggled amid rising global trade tensions. Saudi Arabia’s benchmark index declined as Saudi Aramco reported a sharp drop in annual profits, leading to reduced dividend payouts. The kingdom’s economic diversification plans are now facing increasing financial constraints, forcing a reassessment of major projects.

Meanwhile, Israel has expanded its natural gas exports to Egypt and Jordan by 13.4% despite ongoing security tensions. The Israeli government views this as a strategic move to strengthen regional energy influence and position itself as a key supplier to Europe.

Gaza Ceasefire Crisis Deepens

Israeli officials have warned that military operations could resume if a deal is not reached on the remaining hostages. Hamas, in turn, has accused Washington of encouraging Netanyahu to intensify pressure on Gaza.

U.S. Secretly Engages in Talks with Hamas

In a dramatic shift, the White House has authorized direct talks with Hamas in an effort to secure the release of American hostages. While this could expedite negotiations, it also risks emboldening militant groups to use hostages as leverage in the future.

Red Sea Security Risks Escalate

The Houthis have vowed to retaliate following their designation as a terrorist organization. This raises the likelihood of attacks on Red Sea shipping lanes, increasing regional instability.

Oil Market Volatility Continues

OPEC has increased output for the first time since 2022, while U.S. tariffs on Canadian and Mexican energy imports have disrupted market flows. The global energy sector remains highly uncertain.

Strategic Outlook

The Middle East is at a critical inflection point, with multiple crises converging. The Gaza ceasefire remains fragile, U.S. policies toward Hamas and the Houthis are shifting, and energy markets face continued instability. The coming days will determine whether these tensions escalate into broader conflict or remain contained within diplomatic and economic frameworks.

Geopolitical Risk Assessment for the Middle East
(06-03-2025)

The Middle East remains at extreme geopolitical risk as multiple crises intensify across the region. The fragile Gaza ceasefire is under severe pressure, with Israel swearing in a new military commander and signaling a readiness to resume hostilities if hostage negotiations fail. Meanwhile, the United States has taken unprecedented steps by secretly engaging Hamas in direct talks while simultaneously issuing ultimatums and threats, dramatically altering diplomatic dynamics. Jordan’s border clashes with Syrian-based smuggling networks underscore the ongoing security crisis along the Syrian-Jordanian frontier. The U.S. designation of the Houthis as a foreign terrorist organization has further escalated tensions in the Red Sea, raising the likelihood of retaliatory attacks on shipping lanes. Economically, oil markets remain unstable amid rising OPEC+ output, ongoing U.S. tariffs, and market volatility. The Gulf financial markets are under pressure as Saudi Arabia scales back its economic ambitions due to declining oil revenues. Meanwhile, Israel is rapidly expanding its natural gas exports, reinforcing its regional energy influence. With diplomatic realignments, security crises, and economic pressures converging, the region remains at its highest level of instability.

Geopolitical Risk Index

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

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