MENA in Focus: Potential for Conflict and Cooperation

Iran. Kevjn, what is the deadline for that? And what do we think the outlook will be?

deadline. Any successful deal would probably involve the U.S. conceding some minimal level of uranium enrichment to Iran indigenously on generation and would, as such, probably be similar to the original JCPOA agreement and also probably with constrained clauses that run for a much longer period of time or permanently. Look, I mean, rather than a strict deadline, think of this as several clocks

taking at the same time. So the first clock is legal contractual and has to do with the 2015 nuclear agreement, also known as JCPOA this year, most of the JCPOA's remaining clauses will expire. The critical one relevant to our conversation is a mechanism that can be invoked by existing signatories to the agreement for the snapback of all international nuclear-related sanctions that had been

in place on and run. We don't think Russia and China, the other 2 signatories are likely at all to invoke this mechanism. The Europeans have suggested or would consider invoking snapback by perhaps around August this year, if no progress was in evidence between Iran and the U.S. Snapback of sanctions will be Iran, which will want to do everything in its power to avoid it. Israeli officials have threatened to strike Iran, including

amid the ongoing U.S. Iran think, to openly presidency in this regard, specifically, given Israel would also probably need U.S. support in any strike campaign. Now the second clock is a military one. and relates to Israel's perception of a

roughly 1-year window. There are officials who've argued that now or this period is the most propitious time to strike Iran's nuclear facilities while Iran is weak from October 2024, when it conducted a strikes that neutralized Iran's most advanced air defenses after very significantly degrading Iran's key regional airlines, particularly targeting

underground facilities in Iran. And Israel assistance in air defenses in the event of another large-scale Iranian Trump presidency will probably maintain some flexibility if we alternative nuclear agreement is likely. There's been talk of a possible interim agreement that sets down the broader principles on paper to give time for a more detailed final agreement.

against sanction relief stating that it would provide Iran with the financial capability to increase from what has been made public regarding the U.S. position during recent negotiations is that the U.S. is not currently pursuing the total and irreversible keep at least some level of civilian nuclear program, albeit very much tightly

controlled and monitored. However, despite these apparent policy disagreements, our assessment remains, as Kevin said, that Israel unilaterally, while the U.S. still believes there is value in continuing negotiations, -- and this is because any Israeli strike on Iran's nuclear infrastructure will likely need U.S. backing to maximize the utility of that

strike. U.S. backing greatly enhances the impact of an air campaign targeting Iran's nuclear facilities, especially those facilities located deep underground and it also increases the likelihood of Iranian targeting of U.S. military bases a being left to face the repercussions alone. Therefore, from an Israeli perspective, it is likely deemed preferable to leave the U.S. and Iran negotiate and then the continued absence of a deal or interim nuclear more receptive to the proposal of a

Israel-U.S. -- strike on Iran. And I think if a strike were to occur, we would also likely see some pretty clear indicators of preparations for that strike, most likely in the form of the U.S. moving additional air defense systems and strike carrier groups closer to the Gulf.

Gaza, I mean, it's very likely that the primary purpose of that visit was to pursue Trump's Middle East foreign Israel during that time would not have likely aligned with those objectives at that time as discussions would have likely revolved around Gaza and Iran, topics that would likely have complicated whose stated positions differ quite significantly with that of Israel on Iran and Gaza. Regarding the increased U.S. pressure to allow aid along the lines of

infrastructure. That's just not the case. Policy disagreements on the Iran nuclear

regional neighbors. And been the bedrock of the new government's dominant infections, if that is going to dominate public life. resolved. We're seeing financial support, for instance, Qatar in paying public sector salaries, both Qatar and Saudi support from the European Union, an urgent priority for Syria would be rehabilitating its power grid, the

national power grid. Current provision levels are at roughly 1/5 or just under of pre-war power provision capacity, and this would be a necessary condition to industrial or economic rehabilitation down the road. Foreign companies engaging with Syria are probably going to be skewed more towards MENA than the West, Saudi Arabia and Turkey, so not just be about commercial, but also strategic opportunities actually Syria within their orbit. -- economic rehabilitation is a massive challenge on

its own. But outside the economy, there's still even bigger challenges, including domestic stability or think the Syrian transitional government will continue struggling with through this continue, go for full national integration under the central government, of course, or whether to go for federated structure with autonomy

they remain very suspicious of. Other security challenges include Islamic state remnants inside the country, which the U.S. significantly resurging over the past years as well as separately Israeli military deployments and of both countries aimed least more Finally, an important factor is also what happens to the several thousand foreign

fighters currently in Syria. The U.S., the Trump administration has reportedly accepted just recently that these foreign fighters be incorporated insisted on them being removed. These foreign fighters made up the military government's difficulties in smoothly unifying all the various armections forces that are mainly deployed in northern parts of the country. So in sum, we're talking massive challenges in

Syria. But again, given in particular, Western and Gulf reengagement weeks, this places the new government on a slightly better footing to get its act together.

potential for misidentification. Now inaccurate or incomplete open source data with our data suggesting that the majority of with Israel or the U.S. or U.K. And despite the reduced attack rate on commercial

the main terminal. And in June, after Israeli air strikes destroyed all remaining target Israeli civilian and commercial mean, in terms of a use this capability to target either Red Sea shipping, Israeli critical infrastructure or Israeli aviation as well as potentially returning to targeting of critical economic infrastructure in the Gulf akin to what was seen in the period between 2019 and

2022. Why as a leverage tool to pressure regional states, whether Israel or the Gulf states into adopting policies that the group deems favorable. likely to remain the case for as long as the group maintains territorial control in Yemen. factors to consider. The first goal is likely regarding the substance of a domestic support base.

foreign policy objectives, especially where those policy objectives are very likely domestically popular, such as further aid entry into Gaza are likely deemed important for the maintenance of popular support

administrative control. But beyond that and likely the Red Sea or in the Gulf or in Israel are also demonstrative of intent to project military power to support what that is to secure international recognition or if not international recognition, at least regional recognition of its control

Yemen. So to return to your initial question regarding our outlook for the risk are also multiple triggers in the year outlook that would likely lead to a renewed potentially including the U.S. again or other international shipping, one of which we already podcast and that relates to a regional war scenario between Iran, relate to Israeli and U.S.