Energy

During the 500 days since Russia’s invasion of Ukraine, the Middle East avoided a catastrophic food crisis, thanks in part to the Black Sea grain initiative. Russia’s decision to cancel that agreement is raising fears that the return of supply shortages and skyrocketing wheat prices could quickly plunge the most vulnerable countries of the region into crisis.

The persistence of high food inflation in Turkey belies a deeper problem. Turkish agrifood production cannot adequately cope with increasing water scarcity due to climate change. Challenging Turkey’s own food security, the growing crisis also threatens Turkey’s role as a food supplier to Europe and the Middle East. Regional food supply chain breakdowns due to a decline in Turkish production would create a debilitating economic impact on both regions.

For resource-rich countries such as Gulf oil and natural gas producers, sovereign wealth funds have emerged as promising tools to save for future generations, mitigate the effects of outsized economic shocks, and/or be deployed as reserve investment and strategic development funds to spend on human, natural, social, and physical capital.

Read MEI’s weekly briefing featuring expert analysis of key regional developments for the week ahead.

As environmental challenges become a priority for countries across the Middle East and the Mediterranean, this creates new opportunities for regional environmental cooperation, including between Israel and its neighbors. Despite being limited in scope and facing several key obstacles, regional cooperative endeavors are taking place, including on both the bilateral and multilateral levels, and efforts to sustain and expand them are underway. This new report, written under the auspices of the Israel Climate Forum, addresses the importance of regional environmental cooperation in the Middle East and Mediterranean, examines the scope of such cooperation between Israel and its neighbors, and spells out opportunities, obstacles, and recommendations for increased coordination and joint action, including the role the U.S. and Europe can play.

In the last few years, the global energy outlook has been transformed. The rise of populist politics and a growing sense of urgency about climate change have roiled debates about energy policy in wealthy countries, generating a dizzying mix of new industrial policies. The COVID-19 pandemic made it far harder to predict fuel prices and consumption patterns and forced many countries to confront their connections to fragile multistate supply chains and legacy petrostates.

For the sake of safeguarding transatlantic — and thus also American — security interests in the South Caucasus, it is becoming increasingly imperative that the United States better anchor itself economically, politically, and militarily in the eastern Black Sea region, especially strategically placed Georgia.

The Gulf states emerged from the global pandemic with the wind in their economic sails. But high-profile events like Qatar’s hosting of the FIFA World Cup and the UAE’s World Expo continued to mask two subtle but major weaknesses that have plagued them for decades. Why do Gulf economies lack innovation? And why do they struggle to create private sector employment for nationals?

The current complex situation in the global oil market seriously tests the abilities of OPEC+ to play the role of a regulator, forcing Saudi Arabia to assume the main burden of responsibility for keeping oil prices from declining further and for shoring up the cartel ranks.

After issuing positive statements around greenfield blue hydrogen projects in late 2022, the company, Bloomberg now reports, may be migrating away from the hydrogen scheme and toward LNG exports. Both would require significant capital investment. Assuming the company decides to pursue an LNG export project, it will face many potentially value-erosive challenges and risks that must be overcome before achieving economic success.

Several Gulf states have introduced renewable energy certificates into their low-carbon energy eco-system. What are RECs and how can they help companies navigate the energy transition?

Chinese companies are well positioned to participate in Iraq’s efforts to expand its oil production capacity and develop domestic gas supplies, as they are actively engaged in various energy-related undertakings throughout the country. However, if indeed China’s strategy is, as some have suggested, to become the dominant player in Iraq’s economy, achieving that objective will likely prove difficult given Iraq’s challenging operating environment and contentious politics.

Russia’s full-scale invasion of Ukraine has destabilized and distressed the entire Black Sea neighborhood. Yet despite the war, or perhaps because of it, strategically important foreign direct investments into Black Sea littoral countries, including from the Gulf, have endured or even grown.