Middle East Outlook

In the years 2019 and 2020, the entire Middle Eastern region was marked by significant issues: the long-standing crises (the war in Syria, that in Yemen or the Iraqi situation) were accompanied by new and complex events that often pushed regional tensions to the highest level. The political strategy followed by the past US administration led by Donald Trump turned out to be a destabilisation factor more than once. By way of example, the strategy of “maximum pressure” pursued against Tehran has led to an increase in the risks associated with the actions of Iranian proxies, not only in Iraq but also in Saudi Arabia or in the maritime area of ​​the Persian Gulf and Strait of Hormuz, the latter being a key strategic chokepoint.


As well as the challenges posed by regional and international geopolitcal interests, the Middle Eastern countries were also faced with other domestic challenges. In the years 2019 and 2020, there was a sharp increase in socio-political protests in various countries: Lebanon, Iraq, Iran and in Israel itself. Although mostly connected to endemic and long-standing problems and not just to the contingent ones that caused the protests to break out, socio-political unrest has been exacerbated by the global Covid-19 pandemic. In some way, the health emergency has caused some situations to “freeze”, forcing the Middle Eastern states to deal with those socio-economic issues and demands for major undelayable reforms that have become hard to manage with the pandemic.

United States – Iran

Iran-linked tensions will remain key to the Middle Eastern environment in 2021 as well. The developments of the Iranian question(with all its regional consequences related to the network of Tehran-tied proxies) will especially depend on the political strategy that the new US administration of Joe Biden will follow in the Middle East.


The Trump presidency resulted in a sharp deterioration in Iran-US relations, culminating in the US withdrawing from the Joint Comprehensive Plan of Action (JCPOA) and killing Iranian General Qasem Soleimani (head of the Quds Force) and Abu Mahdi al-Muhandis (leader of the Iraqi Popular Mobilization Forces). In contrast, the new US administration seems willing to reopen dialogue with Tehran, not ruling out a possible return to the JCPOA. This scenario has emerged not only from a few statements by the new President, but also from a number of recent appointments (including CIA Director William Burns, one of the main advocates of dialogue with Tehran. The JCPOA deal was signed thanks to Burns). However, the United States will make resumption of dialogue with Iran depend on a few essential conditions, including complying with commitments made and applying the agreement to regional policies and missile programmes too.


The Trump presidency resulted in a sharp deterioration in Iran-US relations, culminating in the US withdrawing from the Joint Comprehensive Plan of Action (JCPOA) and killing Iranian General Qasem Soleimani (head of the Quds Force) and Abu Mahdi al-Muhandis (leader of the Iraqi Popular Mobilization Forces). In contrast, the new US administration seems willing to reopen dialogue with Tehran, not ruling out a possible return to the JCPOA. This scenario has emerged not only from a few statements by the new President, but also from a number of recent appointments (including CIA Director William Burns, one of the main advocates of dialogue with Tehran. The JCPOA deal was signed thanks to Burns). However, the United States will make resumption of dialogue with Iran depend on a few essential conditions, including complying with commitments made and applying the agreement to regional policies and missile programmes too.

Image 1. Network of regional alliances. Source: Le courier du Maghreb et de l’orient
Image 1. Network of regional alliances. Source: Le courier du Maghreb et de l’orient

Despite the change of strategy that Joe Biden has shown he wants to engage in compared to his predecessor, the resumption of a constructive dialogue between Iran and the US could be hampered by multiple factors. A first aspect is the removal of US sanctions against Iran. A key issue to Tehran and the sine qua non of starting the dialogue, the elimination of sanctions requires a vote by the US Congress. Although the Democrats still have a majority in the Congress and an equal number of votes would come out of the Senate, the proposed elimination of all sanctions may not receive enough support among MPs. Some sanctions indeed concern terrorism and human rights, which many members of parliament, including Democratic ones, are sensitive to.


In addition to the domestic issue of checks and balances, it cannot be underestimated that a possible resumption of talks with Iran would cause a negative reaction from US allies in the Middle East region. The United States will have to constantly weigh up the resumption of dialogue with Tehran and relations with Israel and the Sunni countries of the Gulf (especially Saudi Arabia). Any Israeli inflexibility could jeopardise the dialogue process again and trigger new escalations in the Middle East. It should be kept in mind that US-Israeli relations reached their low point during Barack Obama’s second presidency, largely due to Israel’s opposition to the nuclear deal with Iran. The possible resumption of the US-Iran dialogue could therefore lead to new rifts with Washington’s overseas ally. One of the main Israeli concerns is that, with the new Biden administration, the United States may lose interest in Iraq (leading to an increasingly significant Iranian interference in the region) and, more generally, lead to greater Iranian activity throughout the region (with a new increase in the risk of actions against Israel, especially through Lebanon’s Hezbollah) following the removal of economic sanctions against Tehran.


In addition to the above-mentioned issues, the Biden administration will not have much time to try to reopen dialogue with Tehran.


The June 2021 presidential election in Iran could again be indicative of the electorate’s shift to less moderate stances, as already emerged from the February 2020 parliamentary election outcome. One such shift of the Iranian presidency would inevitably also affect dialogue with the US, as a more hard-line position of Tehran could make it even more complicated to reach a balance between the parties, with possible repercussions for regional stability.

In this context, there could also be new asymmetric warfare operations conducted through the Iranian proxies (Houthi rebels, with regard to Saudi Arabia, Lebanon’s Hezbollah, with reference to actions against Israel, and Iraq’s Popular Mobilization Forces) as a form of pressure on the US administration. There is also a risk of direct operations by Tehran, such as hijacking of ships transiting through the Persian Gulf and the Strait of Hormuz. However, a direct and further-reaching military confrontation between Washington (or its allies, Israel and Saudi Arabia) and Tehran is unlikely for the time being; all the more so now that the Covid-19 pandemic has forced all countries to focus on their internal economic and social problems arising from the health emergency. Moreover, even if a hard-line candidate wins the next Iranian elections, Tehran will unlikely shift back to the same inflexible posture it had during the presidency of Mahmoud Ahmadinejad. The internal economic situation is extremely compromised by the sanctions and the consequences of the pandemic. This could push the more hard-line wing to maintain a merely formal inflexibility (in this case, any possible nuclear talks would especially be affected), without, however, yielding to the temptation of engaging in a larger-scale confrontation. Therefore, the regional environment will continue to be characterised by a very precarious balance.

Image 2. Effects of US sanctions on Iranian GDP. Source: The Economist
Image 2. Effects of US sanctions on Iranian GDP. Source: The Economist

What is certain is that the difficulty of re-establishing a constructive dialogue with the United States and Europe (secondary US sanctions have also been imposed on Europe for having continued to do business with Iran) could lead to stronger relations between Iran and Russia and China. Although a full-scale recovery of trade relations with Europe is a key aspect for the Iranian economy, Beijing and Moscow see Iran as an important ally to contain the US, and could therefore opt for political and diplomatic pressure on Tehran to further obstruct dialogue with Washington.

The Gulf monarchies

The last months of Trump’s presidency have been characterised by a realignment of relations across the Middle East region. The examples are not only the various agreements for the beginning of the normalisation of diplomatic relations with Israel (Bahrain, UAE, Morocco and Sudan) but also the signing, (January 2021) of the ‘solidarity and stability’ treaty. The agreement foresees the end of the dispute with Qatar that began in 2017 and the gradual restoration of normal relations with Doha among the parties involved in the so-called ‘Gulf Crisis’ (Saudi Arabia, UAE, Bahrain and Egypt). Although this rebalancing could come to a halt with the new Biden-led US presidency, which is more inclined to favour the status quo and avoid further highly symbolic steps (especially if the consequences are unpredictable or potentially could stir up regional tensions), the process triggered by the Trump administration has undoubtedly contributed to changing the room for manoeuvre for the various Gulf monarchies, an element that could lead to a partial change in the balance of power between them. In this new context, paradoxically, the Country with the greatest difficulties is Saudi Arabia, until now, leader of the Sunnite powers of the Gulf and historical ally of the United States in the region, by virtue of a stronger “dependence” on Washington. The United Arab Emirates, on the other hand, seem to be taking advantage of this situation: the possibility that Abu Dhabi has of conducting a more autonomous policy with respect to Washington’s wishes (for example, in relations with the other regional ally, Israel) could represent a growing challenge to Riyadh’s leadership position. In this regard, already during 2020, on various occasions (in Libya, but also in the context of the events linked to the aspirations of the Southern Transitional Council – STC in Yemen) the UAE has shown its intention to undertake a more independent policy from that of Saudi Arabia. The same reconciliation agreement with Qatar (wanted by Riyadh and undoubtedly against the interests of Abu Dhabi) could be read precisely in the context of this internal power struggle within the Sunni bloc. In this sense, Saudi Arabia may have reached a détente with Qatar precisely to reaffirm its leadership and thereby confine the UAE to the role of second.

The Qatari issue represents a fundamental question for Abu Dhabi, especially in order to contrast Turkey (Doha’s de facto ally).  During 2020, political and strategic differences between Ankara and Abu Dhabi have significantly increased (particularly with regard to Libya), and for each of the two countries, the other has become the main regional competitor. For this reason, over the next few months, it will be Abu Dhabi above all that will continue to pay close attention to Doha’s political choices and actions and, if necessary, to underline any cracks to continue to maintain, and if possible foment again, tension with Qatar and consequently, Turkey.

The Yemeni conflict and its impact on Riyadh

Despite the beginning of a dialogue between Saudi Arabia and the Yemeni Shiite Houthi group, as well as between Riyadh and Yemeni separatist groups in the south integrated into the STC, the Yemeni conflict will continue to be characterised by high uncertainty and open armed conflict throughout the year. Although the Biden administration has already made a decisive change of approach to Yemen (ending military support for the Saudis), the conflict is unlikely to be resolved in 2021. Alongside the continuing clash between the factions loyal to President Hadi and the Houthi rebel group, there is a risk that tensions in the south between the central authority and separatist groups will explode again (as last seen in August 2019), definitively opening up a new front in the conflict.

Image 3. Territorial control of various factions in Yemen (October 2020). Source: Polgeonow
Image 3. Territorial control of various factions in Yemen (October 2020). Source: Polgeonow

Consequently, Saudi Arabia will remain strongly focused on the Yemeni issue, especially given the impact the conflict has on security within the Kingdom’s borders. After a sharp reduction recorded between the last months of 2019 and the first months of 2020, cross-border attacks carried out by the Houthi towards Saudi territory progressively resumed during 2020, confirming the persistence of a concrete risk for Saudi Arabia linked to the group’s activity. In the last two years, the Houthi have also shown growing operational capacity and availability of more sophisticated means: although the supplies that reach the group come mostly from Iran (which is currently experiencing extreme economic difficulties and this obviously affects the concrete possibility of supplying its proxies), the recurrence of high profile attacks claimed by the Houthi in Saudi territory cannot be excluded also during 2021. Finally, the Houthi could try to put greater pressure on the international community by intensifying their activities in the Red Sea (as a recent increase of asymmetrical attacks in the area would seem to indicate).

Turkish regional policy

Turkey will remain a major regional player in 2021, especially in Syria, Libya and the Eastern Mediterranean. Turkey’s ambitions are aimed at building a regional sphere of influence that responds to the logic of a neo-imperial policy. This prominence, especially in the eastern Mediterranean, will in all likelihood compact the regional array of countries hostile to Turkish interests and will affect the relations between Ankara and other regional players (especially Israel and Egypt, interested in putting a brake on Turkish energy and political ambitions), Moscow and Europe (with particular reference to France).

As far as relations between Turkey and Israel are concerned, it should be noted that some statements made by the Israeli leadership during 2020 show a progressive shift of Israeli attention from the threat coming from Teheran to that coming from Ankara. Although Iran will continue, as already mentioned, to be one of the principal antagonists of Israel, Turkey will increasingly represent, during the course of 2021, and also in the coming years, one of the principal regional competitors for Israel. As a result of the strong Turkish leadership, it is very likely that, also in the course of 2021, political and diplomatic tensions will increase repeatedly in the Eastern Mediterranean, especially with reference to the situation in Cyprus and, more generally, to the dynamics of the management of offshore resources and the EastMed project. In this context, we cannot exclude the recurrence not only of episodes such as that of August 2020, when a Greek ship rammed a Turkish vessel, but also of events with direct impact on the activity of companies operating in the energy sector as in 2018 with the case of the Saipem 12000.

Main internal political issues

As far as domestic political aspects are concerned, two countries will be particularly closely watched in 2021.

In March 2021, Israel will see its fourth parliamentary elections in about two years, which, as in the past, are unlikely to give an absolute majority (the proportional system in force favours coalition governments) to Benjamin Netanyahu’s Likud (currently on trial for corruption) or to Benny Gantz’s Blue and White Party. In all likelihood, the same difficulties that occurred in the previous elections will arise again, aggravated by the conceivable impossibility of reaching a new coalition agreement between the two main parties after the experience of the now failed one. On the other hand, even if it should not be Netanyahu’s Likud that emerges (an unlikely hypothesis), Gantz’s line would hardly lead to a politics that is excessively different from the one followed up to now, especially with reference to the Palestinian question. Moreover, the choices of the Biden Administration will also affect the latter. It will be logically impossible for Biden to cancel, after almost three years, Trump’s decision to transfer the American embassy from Tel Aviv to Jerusalem; nevertheless, and always in the context of the traditional pro-Israeli politics, the new American administration could follow a more moderate path compared to the previous one, above all, on themes such as, the annexation of the Israeli settlements in the West Bank.


The other country in the region to watch closely during 2021 is Lebanon. The cedar country has been without an effective government since August 2020. Although Lebanon has experienced long periods of political vacuum in the past (both at the governmental and presidential levels), the current lack of a government raises serious concerns due to the enormous economic difficulties the country has been facing as of 2019, aggravated by the explosion of the port of Beirut, the handling of the Covid-19 pandemic and the growing political instability Some sources report losses in the financial sector exceeding $100 billion, estimating that Lebanon would now need an aid package of at least $63 billion, a figure considerably higher than the initial loan estimates made during past negotiations with the international community. According to the same sources, all Lebanese banks are currently insolvent. It is precisely the financial management of the Lebanese Central Bank that has caused a large part of its monetary reserves to be progressively drained from the banks in recent years. As for the real economy, international institutions have estimated a fall in GDP of at least 25% by 2020. Food prices had already risen by 49.6% in May 2020 and, according to the most recent data, consumer prices have increased by more than 66% since the beginning of 2020 and by 131% since September 2019. According to estimates made in June by the Beirut Merchants Association, the risk of bankruptcy of Lebanese businesses has increased considerably. Additionally, the purchasing power of the Lebanese has dropped dramatically (also due to hyperinflation) and poverty rates have risen (at least 55% of the population is reportedly currently living below the poverty line), mainly due to the increase in the unemployment rate (which has reached 35% nationwide). The crisis of the real economy has obviously also been aggravated by the restrictions introduced to manage the Covid-19 pandemic. Moreover, according to the most recent evaluations, the impact of the destruction of the port of Beirut has also had enormous consequences on the country’s already severely strained economy: the number of containers transiting through the port of Beirut fell by 42.2% between January and October 2020; ship traffic dropped by 23.2% over the same period and the quantity of goods decreased by 35.9%, reaching an absolute value of 3,684 tonnes in total. The port’s economic revenue amounted to $92.4 million from January to October this year, a decrease of 44.5% compared to the same period last year.

Image 4. Graphic on Lebanon's economic data. Source: AFP
Image 4. Graphic on Lebanon's economic data. Source: AFP

Lebanon’s difficulties in forming a new government and the possible continuation of the current political vacuum in further months are likely to have an irreversible impact on the country’s institutional and economic stability. The lack of a government with full powers renders impossible the continuation of negotiations between Lebanon and the International Monetary Fund to establish an economic rescue plan for the country, as well as negotiations with international partners to receive the expected financial and humanitarian aid. Moreover, even the formation of a new government is unlikely to remedy the country’s political and social situation. The ambitious project to profoundly reform the Lebanese system comes at such a cost for the Lebanese political parties and even personally for many of the protagonists of institutional life that it will be extremely difficult to implement a real restructuring of the country’s system. On the other hand, the whole of Lebanese society appears to be tied, regardless of its formulation, to the logic of patronage, dictated above all by the fact that it comes from the religious communities and the large families that control all the main state activities and the provision of essential services. The most probable scenario for 2021 is the continuation of the political stalemate in which the Country finds itself, which will be followed by an irremediable compromise of the economic-financial situation of Lebanon, unless there is substantial international aid, which, however, does not seem probable at the moment (also due to the global economic situation linked to the Covid-19). Although up to now the political instability has not taken the form of a religious polarisation of the society, the prolongation of this situation of extreme social and political-economic difficulty could negatively affect the religious balance of the Country, leading to episodes of greater community tension. In addition, the next government will also have to negotiate the financial aid necessary to revive the Country with the main international players, avoiding generating extreme geopolitical imbalances, otherwise regional instability and external pressures will increase.


In terms of regional and international relations, Trump’s politics in the Middle East has generated a number of issues that, even assuming a return to a new status quo here and now, will continue to develop in the course of the current year. Regardless of this, the change of course highlighted several times at the beginning of the Biden administration could pose new challenges and determine new dynamics both within individual countries in the region and in relations between them.

On the tenth anniversary of the “Arab Springs”, the crisis scenarios that opened in 2011 continue to be confirmed: Syria, Iraq and Yemen. In addition, and ten years on, Lebanon is also included now. Lebanon will undoubtedly be one of the countries in the area likely to undergo major developments in 2021. Scarcely affected by the major upheavals in the 2011 revolutions, ten years after that ‘Spring’, the security situation in the ‘Land of the Cedars’ could be irreversibly affected not only by internal but also by regional divisions. In fact, in its little more than 10,000 square kilometres and with 17 different historically recognised religions, all the regional contradictions are condensed and, once again, the complexity of the Middle-Eastern panorama is revealed.

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