Economics

The India-Middle East-Europe Economic Corridor (IMEC) is a proposed multinational infrastructure initiative aimed at upgrading connectivity between the three regions through integrated trade, energy, and digital networks. Announced at the G20 summit in New Delhi in September 2023, IMEC is envisioned partially as a counterweight to China’s international infrastructure project, the Belt and Road Initiative.

This is a special edition of the MENA Energy Recap — a quarterly review of key energy developments that took place in the region from January through March of 2026 and what they signal in the months ahead. For Q1-26, the recap considers some of the long-term implications of the ongoing war in the region, which have caused the largest energy supply disruption in history, and what lessons these events hold for both near- and long-term energy dynamics in both the Middle East and the wider world.

While Egypt is not in the direct line of fire in the US-Israeli war with Iran, its economy is acutely vulnerable to the conflict. In addition to the rising energy prices and shortages that have affected much of the world, it also struggled with issues that reflected its economy’s own underlying structural vulnerabilities.

The war-time disruptions of international shipping passing through the Strait of Hormuz are spreading through the fertilizer market and affecting supply chains encompassing regions that have no margins to absorb the impact. The Sahel is one such region and now faces a severe threat of widespread hunger.

The war with the US and Israel has intensified pressure on the Iranian economy, but it has not represented a fundamentally new shock. The key question is not whether pressure exists, but whether it can be made decisive.

The Iran war has posed significant immediate challenges for Turkey, including rising energy prices. But Turkish officials think that Ankara could reap benefits from the war in the long term.

The following study discusses the role of Lebanon’s gold reserves in the establishment of a currency board and evaluates four policy options: a true currency board, constrained central bank reform, full dollarization, and a unified managed float. Gold reserves are relevant under all four. The conclusion is consistent across them: no monetary framework, however carefully designed and however well backed, can substitute for the prior political decision on who bears Lebanon’s losses and how the state will finance itself sustainably.

This special episode of Middle East Focus features a conversation from MEI’s Virtual Briefing Series. Host Alistair Taylor is joined by former National Security Council Senior Director Stephen Flanagan and MEI Senior Fellow Iulia-Sabina Joja to discuss the impacts of the Iran war on US-European relations. The conflict has hit Europe’s economy hard and created deep divisions across the continent, even as some European countries play a quiet supporting role to the US. President Donald Trump has called for NATO member states to help secure shipping through the Iranian-blocked Strait of Hormuz, a critical chokepoint for international maritime trade. Flanagan and Joja explore the prospects for stepped-up European military involvement, the knock-on effects on the war in Ukraine, and the potential longer-term impact on the future of the US-European alliance.

When the United States and Israel launched military operations against Iran a month ago, the Middle East was plunged into debilitating conflict. Nevertheless, Syria has remarkably just completed its most stable month in 15 years. Damascus and its international partners must capitalize on this opportunity.

The Gulf Cooperation Council (GCC) states are confronting the greatest threat to their economic security and energy strategy since their formation. The economic fallout of the US-Israeli war with Iran is severe, but uneven across the Gulf. So too is each state’s ability to sustain energy exports and protect critical infrastructure—both of which have been targeted unequally by Iran.  

The US-Israeli war against Iran has created the largest disruption to global oil and liquefied natural gas supplies in modern history. There is a tremendous amount of economic uncertainty for Gulf states to navigate, and it will reshape the way they engage with one another and with Iran, Israel, and the United States for years to come. But this war has also laid bare how urgently the United States needs to update its own approach toward the Gulf states when it comes to energy.