Six months have passed since the Kremlin began its assault of Ukraine. The Middle East has been significantly impacted by the largest European war since 1945, which is taking place as Russia blasts its neighbour.
The Middle East, a troubled region with many ongoing issues, was not exempt from the repercussions of the war in Europe; there were food shortages and inflation, which raised concerns about political instability amid a struggle between Russia and the West for friends.
However, despite the ongoing war, several of the region's nations have benefited greatly and seen their economies grow by hundreds of billions of dollars.
Over the past six months, the Middle East has been impacted in the following ways by the Ukraine War:
Energy exporters are cashing in
Oil prices have risen to a 14-year high as a result of the war. Globally, this has led to skyrocketing inflation and a downturn in the economy, but for the energy-rich Persian Gulf governments, it is welcome news following an eight-year economic downturn brought on by low oil prices and the Covid-19 pandemic.
According to the IMF's forecast, the Middle Eastern countries that sell oil would earn an additional $1.3 trillion in revenue over the next four years, the Financial Times reported last week.
With the additional funds, Gulf states will see their first budget surpluses since 2014. Additionally, a notable acceleration in economic growth is anticipated. For instance, the Saudi economy expanded by 9.9% in the first four months of this year, the greatest rate in ten years. The US economy contracted by 1.5%, in stark contrast.
For the area's gas producers, the fighting has also opened up new possibilities. For many years, European nations chose to purchase gas from Russia through pipelines rather than having it transported by ship from other regions. However, as Europe gradually weans itself off Russian gas, it is searching for prospective new suppliers. In four years, Qatar has committed to supplying Europe with half of its entire gas capacity.
Additionally, the EU has agreements for gas with Israel and Egypt, two potential regional hubs for natural gas. In addition, UAE President Sheikh Mohammed bin Zayed al-Nahyan inked a contract guaranteeing the UAE's export of diesel to France during a visit to Paris this month.
Strongmen feel emboldened
Strongmen in the region who were formerly harshly criticized by the West seem to be regaining popularity.
US President Joe Biden traveled to Saudi Arabia in a historic trip last month after promising to make the country a pariah. The action was perceived as a surrender to the kingdom's influence on the world economy in the hopes of increasing oil production and containing global inflation before the US midterm elections in November. The OPEC+ oil cartel, led by Saudi Arabia, decided to modestly increase oil production instead, which one analyst referred to as a "slap in the face" for Biden.
Recep Tayyip Erdogan, the president of Turkey, has been able to establish himself as a key player in the world order thanks to the conflict. He has cleverly exploited his nation's geopolitical position to gain concessions for Turkey abroad by postponing the admission of Nordic nations to NATO in the face of a faltering economy at home and elections the following year. Erdogan has also kept friendly ties with Russia despite outwardly opposing the conflict, supplying Ukraine sought-after drones, and even mediating between the warring parties.
Alliances are shifting
Alliances change when trade routes do as a result of the conflict.
The conflict has demonstrated that the international order is no longer unipolar with the United States at its head, according to Anwar Gargash, adviser to the president of the UAE. He also questioned the US dollar's continued dominance in the world economy. He claimed that Abu Dhabi is reviewing its partnerships. He continued, "Western hegemony on the international system is in its dying days. Following the UAE's decision to abstain from voting on a US-supported UN Security Council resolution denouncing Russia's war in February, along with India and China, the nation's ambassador to the US stated earlier this year that relations with Washington were undergoing a "stress test."
Relationships with China seem to be strengthening as those with the West are being reevaluated. In a statement last month, the UAE emphasized its support for the one-China policy and referred to House Speaker Nancy Pelosi's trip to Taiwan as "provocative." Saudi Arabia has increased military ties with Beijing and considered selling oil to Beijing in yuan as part of its promotion of China as a rival to the US. President Xi Jinping of China, who hasn't traveled outside of China since the Covid-19 travel restrictions went into effect, is anticipated to visit the kingdom this year and create history there.
Where in the world today is the potential? The Atlantic magazine quoted Saudi Crown Prince Mohammed bin Salman (MBS) in a piece from March. "Saudi Arabia is where it is. Additionally, I think other folks in the East will be ecstatic if you decide to miss it."
The
US is keeping track. President Biden said in a Washington Post op-ed that he
was placing the US in the "best possible position to outcompete
China" by going to Saudi Arabia.
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