2019 second-quarter forecast

Middle East and North Africa

The Middle East and North Africa is the world's crossroads. It encompasses the Arabian Peninsula, the mountains of Iran, the plains of Turkey, the deserts of the Levant, the lands north of the Sahara and all coasts in between. The story of the region, as is so often the case of places stuck between foreign players, is the story of trade, exchange and conflict. The traditional powers of the region are Turkey and Iran — Saudi Arabia and Egypt are the current Arab powers — and their competition for influence over the region's weaker states makes the Middle East and North Africa an arena of violence and instability.

7 MINS READMar 10, 2019 | 21:51 GMT
The Middle East and North Africa encompasses the Arabian Peninsula, the mountains of Iran, the plains of Turkey, the deserts of the Levant, the lands north of the Sahara and all coasts in between.

The Middle East and North Africa encompasses the Arabian Peninsula, the mountains of Iran, the plains of Turkey, the deserts of the Levant, the lands north of the Sahara and all coasts in between.

(Chris Jackson/Getty Images)

Key Trends for the Quarter

Turkey Takes Advantage of the U.S. Drawdown in Syria

The United States will negotiate the gradual withdrawal of U.S. forces from Syria throughout the second quarter. The resultant power vacuum will aggravate existing competition for influence there among Turkey, Syria, Russia, Iran and Israel. This increases the risk of any one of these states sparking conflict with another. Turkey stands to benefit the most from the U.S. drawdown by expanding its ability to limit the growth of a Syrian Kurdish region in the northeast of the country, but Ankara will still face considerable opposition from other powers seeking to stifle its incursions into Syria.

With a diminished U.S. presence in Syria, there is an increased possibility of a tactical misstep leading to a conflict between the remaining powers.

Israel, meanwhile, will be more assertive in its strategy of striking Iranian assets in Syria that could pose a threat to the Israeli heartland. Syria's pariah status in the Arab world will begin to fade, however, as countries in the region resume trade ties. There are already signs that powerful Arab Gulf states will thaw frozen relations with the very government they opposed through most of the Syrian conflict, viewing rapprochement as a useful counter to Iranian influence in the Arab world. For more on the involvement of Turkey and other key powers in Syria, read our latest update.

A map breaking down the current areas of control in the Syrian civil war

Iraq Grapples With Its U.S. Alliance

The U.S.-Iraq security pact will survive increasing domestic Iraqi political pressure this quarter to expel Western forces from the country. The deliberation will mostly play out in Baghdad's increasingly nationalist parliament. Iraqi concerns over the potential resurgence of the Islamic State will help maintain ties with the United States as a security backer for Baghdad, while Washington views its presence in Iraq as critical to its ability to maintain a strong front against Iran and ensure regional stability even after withdrawing from Syria. A perpetually unstable security situation in Iraq also creates opportunities for the Iraqi Kurdish government to work productively on counterterrorism efforts with the federal government in Baghdad, which in turn lays the groundwork for cooperation on long stagnant economic issues between the two governments, such as oil export revenue sharing. For more information, read our latest assessment on the strained U.S.-Iraq relationship

Is the Nuclear Deal Still a Good One for Tehran?

The dwindling incentives for Iran to stay within the framework of the Joint Comprehensive Plan of Action (JCPOA) nuclear deal will become clearer than ever this quarter. Payment channels that Tehran set up to conduct transactions for basic goods — including INSTEX, the much-touted European payment mechanism — will fail to deliver the oil trade or investments that Iran needs to shore up its economy. Neither will they bring the security guarantees Tehran desires. A May 4 deadline for Iranian oil purchase waivers from U.S. sanctions will bring about a steeper cut to Iran's oil exports, meaning economic strain and protests in Iran will steadily mount.

Iran will be thinking twice about whether to remain within the terms of the nuclear deal it agreed to with the West, but Tehran won't reject the JCPOA this quarter.

Political infighting in Tehran will accelerate this quarter between moderates promoting continued negotiations with the West and hard-liners promoting isolationism, but the moderates will win the argument for now. After all, Iran pulling out of the JCPOA at this juncture — especially if it involves a restart of nuclear activities barred under the terms of the deal — would likely provoke a limited military strike response from the United States or its regional allies such as Israel. But every economic disappointment courtesy of the West gives Iran's hard-liners more leeway to demand that Supreme Leader Ayatollah Ali Khamenei allow them to push back through other means, possibly employing the country's cyberwarfare capability or regional proxy network. For more details on Iran's relationship with the European Union and the United States this quarter, read our latest assessment.

A chart showing oil exports from Iran

The West Assesses Its Gulf Arab Connections

Lawmakers in the United States, United Kingdom, France and Germany will intensify their debate over how they support and arm their Arab Gulf allies, especially the assertive Saudi-Emirati axis. This debate could erode Western support for Saudi Arabia's coalition in the Yemen civil war, where humanitarian concerns are increasingly salient political barbs in the United States and Europe. These debates will also touch on the role of Crown Prince Mohammed bin Salman in the government of Saudi Arabia: The strength of his influence will hamper cooperation between the West and the Gulf Cooperation Council (GCC), ranging from nuclear power initiatives to arms sales. To satisfy their economic and military reform drives without relying on the West, Gulf Arab states will increasingly turn to partners with fewer human rights scruples, such as Russia, China, India and Pakistan, for new investment, trade and security agreements. For more on relations between the West and the GCC, our latest assessment explores how the conduct of certain states can affect government policy, or not.

Hamas Takes Aim at a More Determined Israeli Government

On April 9, Israel will hold elections amid rising nationalist sentiment, giving the new government a stronger mandate — with fewer political constraints — to start a war with Hamas militants in the Gaza Strip. Any provocation from Hamas, spurred by its long-deteriorating economy and diminishing foreign aid, will more likely result in potent Israeli military action throughout the quarter. A Gaza conflict, however, will freeze or even reverse Israel's growing diplomatic outreach to the Gulf Arab states. Further, any such conflict will reinforce those critical of U.S. policy toward Israel in the United States, part of a growing trend of lawmakers calling for a reassessment of Washington's close-knit ties with Israel and Israeli-aligned policies in the Middle East. For more on Israel's upcoming elections, read our assessment on how the ballot could shape the country's regional strategy.

Algeria at a Precipice

Algeria's presidential elections in April will highlight a rare moment in the country's history. Political momentum favors incumbent President Abdel Aziz Bouteflika, but an unusual level of opposition is coalescing around the issue of the country's profound economic debility. No matter who wins, the results will show soaring popular frustration with a government that isn't answering the needs of its people, a fact underscored by ongoing political protests scouring the country.

A map showing Algerian natural gas infrastructure

Algeria is approaching a tipping point in upcoming elections; for the first time in 20 years, there is a narrow opportunity for an opposition candidate to win.

This public discontent could exacerbate domestic instability and force the government to change some of its economic policies. Beyond appeasing the population, if Algeria were to improve its foreign investment and hydrocarbon investment laws, the government could improve its trade transactions with European trade partners. Read more about how Algeria's election will be particularly important to watch this quarter.

A chart showing Algeria's economic and unemployment challenges

Additional Forecasts

These Stratfor assessments provide additional insights for the Quarter

Key Dates to Watch

  • March 31: Turkish municipal elections.
  • March 31: Arab League Summit in Tunisia.
  • April 9: Israeli national elections.
  • April 18: Algerian presidential elections.
  • May 4: The United States will decide on extensions for waivers on Iran's oil sanctions.

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