A new balance of power will emerge in the Middle East

At its start, 2023 was supposed to be a year of regional de-escalation in the Middle East. Saudi Arabia agreed to a detente with Iran in March; it was also talking with America about a three-way deal that would have seen it normalise ties with Israel. Civil wars in Libya, Syria and Yemen had ground to a stalemate. Prosperous and stable, the Gulf states were the new centre of power in a region exhausted by conflict—and they wanted everyone to settle down and focus on economic growth.

So much for that idea. A month after the Saudi-Iranian deal, Sudan tipped into a gruesome civil war. Then came the terrible massacre in Israel on October 7th, perpetrated by Hamas, and a long and ongoing Israeli war in Gaza. After a long period of relative quiet, the Middle East’s oldest conflict roared back to life and brought the entire region to the brink of broader violence.

The consequences of the Gaza war will define 2024. Some of those seem contradictory. On the one hand, fragile detente between Iran and Saudi Arabia will continue. The events of October were a reminder of Iran’s reach: its proxies fired missiles at Israel from Gaza, Lebanon and even far-away Yemen, while other militias attacked American bases in Syria and Iraq. Gulf states reacted with fear: they did not want to be targeted, as Saudi oil fields were in 2019. They will strive to keep the peace with Iran, though it will be a hollow one. Talk of big Gulf investments in Iran will remain just talk.

At the same time, efforts toward Israeli-Saudi normalisation have been delayed, but not completely derailed. Muhammad bin Salman, the Saudi crown prince and de facto ruler, has both economic and security interests in reaching a deal with Israel. Negotiations will continue, but they will be quieter and more complicated than before. The Saudis will want more concessions towards the Palestinians from Israel. There will be much to renegotiate—and an election year in America is a bad time to do that. Talks are unlikely to conclude in 2024.

Outside the Gulf, many Arab countries will be nervous as the new year begins. Egypt is one example. It now has two active wars on its borders (in Gaza and Sudan) and one frozen but unresolved (in Libya). It also must repay $29bn of external debt in 2024, a sum equivalent to 85% of its foreign reserves. King Abdullah of Jordan is worried that a long conflict in the Holy Land will spark unrest among his own large Palestinian population, who are already angry about a stagnant economy.

These regimes will be focused on survival. They will try to parlay the Gaza crisis into opportunity. Egypt, for example, might seek financial aid as compensation for its role as a provider of humanitarian aid for the enclave.

For years, Arab countries had talked of a new balance of power in the region. America seemed distant, while Russia and China tried to accumulate both hard and soft power across the Middle East. The attack on October 7th has brought the region’s biggest crisis in decades. As a result, America has sent two aircraft-carrier groups, an array of missile-defence batteries and planeloads of troops, as its secretary of state embarked on some frantic shuttle diplomacy. Russia appeared to content itself with taking jabs at perceived Western hypocrisy, while China seemed confused and disinterested.

America might wish to be done with the Middle East—but the Middle East is not done with America. It will have a chance to consolidate its role as a regional power. Before the Gaza war, it had been discussing a mutual-security pact with Saudi Arabia. That may now look much less attractive to leaders in Washington. The Saudis have sought to sit out any possible regional conflict, which suggests that a defence treaty would hardly be mutual. That, too, will need to be negotiated anew—but President Joe Biden will have little time to do so.

The Gulf states were not wrong to believe that economics is a pressing issue for the Middle East. Where they were mistaken was in believing that the region’s frozen conflicts would remain frozen. With luck, the coming year will bring new efforts to resolve them, starting with the endless feud between Israelis and Palestinians. ■

Gregg Carlstrom, Middle East correspondent, The Economist, Dubai