Research & Commentary Results

In the summer of 2003, King Abdullah II told Bloomberg Jordan sits “between Iraq and a hard place,” a play on words designed to describe the kingdom’s challenging environment to an American audience amid the US-led Iraq war to the east and the lingering Palestinian-Israeli conflict to the west. Jordan is grappling with a much “harder place” today.

There may be no near-term resolution to the conflict between the United States, Israel, and Iran. The cease-fire and memorandum of understanding (MoU) signed on June 18  have broken down, there is little diplomatic engagement, and new flare-ups in early September indicate a further round of escalation. Gulf states may have no choice but to protect their assets and populations while trying to deter Iran by finding mechanisms of both containment and accommodation.

Across the Gulf, views differ widely on how the Iran war can and should end, and what the region will look like once it does. Yet on the crisis over the closure of the Strait of Hormuz, the view is near-unanimous that a repeat is not only possible but likely. That expectation, more than any single incident over the past year, is becoming a major driver of decision-making in industry and policy circles alike.

When Iranian drones struck two Amazon Web Services data centers in the UAE on March 1, 2026, and damaged a third in Bahrain the same morning, many thought this could spell the end of the Gulf’s AI ambitions. Whatever the intent, the attacks highlighted the new reality that data centers have now become targets in inter-state wars.

Egypt, which is not party to the war on Iran, has become a target as well as an intermediary in the conflict. As a result, the war has affected Egypt’s future calculations, particularly in three major areas: its economy, its security, and its regional alliances. 

Apart from the brief honeymoon period between 1961 and 1963 under President John F. Kennedy and President Nazim al-Qudsi, US-Syria relations have never held such optimistic potential as they do today. Today, following the fall of Bashar al-Assad regime and the rise of a new government under President Ahmad al-Sharaa at the end of 2024, a new geopolitical window has opened.

North African governments have sought to remain outside the US-Iran conflict, regardless of their differing alignments and preferences. Geography insulates them from the fighting, but not from the consequences. That duality is the region’s predicament: what makes North Africa useful to others is what leaves it exposed.

Gulf Cooperation Council states are investing hundreds of billions in AI infrastructure, data centers, and semiconductor capabilities, making technology central to post-oil economic diversification. Yet this expansion faces a critical constraint: severe water scarcity turns AI growth into a challenge, as data centers in some of the world’s most water-stressed territories strain already overextended hydrological systems. The U.S.-Iran war has also underscored the physical vulnerability of the infrastructure supporting these ambitions. Together, these pressures raise pressing questions about the sustainability and scalability of Gulf states’ AI-driven development strategies.

With sanctions repealed, Syrian policymakers must ensure that growing volumes of credit reach beyond the narrow political and commercial networks that have generally dominated Syrian finance. That will require a credit strategy aimed at sectors and regions historically excluded from formal finance. Syria’s specialized state banks offer an imperfect but ready-made mechanism to do so.

The MENA Energy Recap is a quarterly review of key energy developments that took place in the region from April through June of 2026 and what they signal in the months ahead. The Recap views these developments through the lens of policy and strategy, energy security, and markets.

For more than a decade, assessments of Chinese strategy in the Middle East and Africa have focused on assets, including the ports Chinese firms own, the pipelines they finance, and the networks they build. This lens has produced familiar maps of Chinese “footholds” and debates over future military bases, but ownership alone reveals less about influence.

The more useful question is not what China owns, but how Chinese firms become embedded in the operational and digital systems that keep trade corridors moving. Influence derives not from controlling infrastructure outright but from participating in the governance of the networks that move goods, data, finance, and information across them.

Something more consequential than another oil market disruption is underway. The Iran war has exposed and accelerated an institutional weakness within OPEC that had been building for years. The closure of the Strait of Hormuz, the UAE’s departure, Iraq’s brief flirtation with exit, and the continued rise of U.S. oil production all point to a deeper question about the cartel’s durability. The issue has shifted from OPEC’s ability to manage crises toward whether its model of collective discipline can withstand mounting structural strain.

During the opening days of the 2025–2026 U.S.–Israel war with Iran, Kuwait’s military briefings highlighted intercepted Iranian missiles and drones while revealing little about strike locations or damage. The approach reflected a familiar wartime dilemma in which governments must reassure populations while limiting information that could aid adversaries or fuel uncertainty. Yet Kuwait’s response revealed a broader shift across the Gulf. Information was no longer simply a messaging tool; it had become part of the battlefield.

At the recent Lianhe Zaobao Singapore-China Forum 2026 in Singapore, Professor Joseph Liow, dean of the Lee Kuan Yew School of Public Policy and chairman of the Middle East Institute at the National University of Singapore, suggested that the Strait of Hormuz (SOH) may be entering a “new normal”, one in which Iran — and perhaps Oman — could justify charging vessels fees for transiting one of the world’s most important waterways.

Iraqi Prime Minister Ali al-Zaidi is on something of a diplomatic roll at the moment. Having concluded a weeklong visit to the United States on July 19, 2026, during which he charmed President Donald Trump, al-Zaidi is now expected to head to Tehran to do the same with Iran’s new leaders. Trips to Qatar, Saudi Arabia, Turkey and Syria all figure on his itinerary, too.