The Middle East is undergoing a seismic shift with uncertain outcomes, from Israel and Palestine to Yemen and Iran. Conflicts ripple through old alliances as regional leaders navigate a path that seems carved by forces beyond their control. Saudi Arabia sits at the center, trying to balance wars in Yemen and Gaza with the pursuit of broader stability that could unlock decades of regional calm and diversify an economy still tied to oil.
Saudi Arabia remains synonymous with oil wealth. In a move tied to climate diplomacy and energy strategy, the kingdom pushed back against a hard timetable on fossil fuels during COP28. Riyadh, acting as de facto head of OPEC, leaned on the United Arab Emirates to soften final language and remove a firm commitment to end fossil fuel use. In the end, the parties agreed to accelerate efforts to reduce reliance on oil rather than abandon it altogether.
COP28 was only the latest chapter in tensions surrounding Saudi priorities. The war in Gaza, ignited by an unprecedented attack by Hamas on October 7, intensified the pressure on Saudi policymakers as they weighed a possible shift toward closer ties with Israel against the risk of alienating key partners in the Arab and broader Muslim world. The move signaled a recalibration rather than a confrontation with two long-standing neighbors.
Bernard Haykel, Professor of Near Eastern Studies at Princeton University, notes that Hamas aimed to re-center the Palestinian question on the global stage while complicating moves toward normalization between Saudi Arabia and Israel. Those predictions rang true when Mohammed bin Salman ordered a halt to negotiations with Tel Aviv. The statement reflected a clear stance: any rapprochement with a country that has suffered heavy civilian casualties and that Israel describes as vital for its security would require a grounded path toward ceasefire and negotiations.
The Saudi leadership has made it clear that civilians on both sides deserve protection and that the broader goal should be a political settlement. Through this lens, Riyadh has proposed revisiting the Arab Peace Initiative of 2002, which envisions full normalization of relations in exchange for a viable Palestinian state, and a return to negotiations that could broaden regional security and economic cooperation.
Yemen attacks
A new, volatile layer emerged when Yemeni Houthi rebels launched punitive actions against Israel in solidarity with their Palestinian counterparts. The Houthis control much of Yemen since the 2014 civil war began, despite a coalition led by Saudi Arabia aimed at restoring the government of President Abed Rabbo Mansour Hadi. The conflict has cost hundreds of thousands of lives and left a large portion of the population in desperate need of humanitarian aid.
In the Red Sea and Bab al-Mandeb Strait, the Houthis widened their operations against shipping, seizing vessels and targeting ships with missiles and drones. In recent developments, a large cargo ship was attacked, underscoring how vulnerable global trade routes have become and how quickly regional actions can ripple through international markets. Analysts suggest this strategy may aim to pressure allies to reconsider their support for Israel by driving up costs and complicating energy and defense calculations, with Iranian influence suspected in some missiles and technology.
This ongoing crisis has intensified discussions about how the region can stabilize under shifting alliances. The Gulf states appear intent on maintaining a balance that allows them to confront immediate security threats while pursuing long-term economic diversification and strategic autonomy.
Iran–Saudi Arabia relations
The geopolitical maneuvering often looks like a double game. Although Iran established support for Yemeni factions opposing Saudi-led forces, the two regional powers have shown a willingness to explore a new phase of engagement. Earlier this year, Tehran and Riyadh restored diplomatic channels with backing from Beijing, reopening embassies and restoring direct flights. An expected visit by Mohammed bin Salman to Tehran could mark a turning point in the broader regional order, potentially easing what has long been described as a Shiite crescent versus a Sunni stronghold narrative centered on Mecca and Medina.
Riyadh continues to strike a careful balance among the Global South, Western partners, and traditionally wary actors like Russia. In December, discussions between Mohammed bin Salman and Vladimir Putin at the Al Yamamah palace underscored a shared interest in sustaining energy cooperation within OPEC+ while avoiding escalation in a broader geopolitical clash. The outcome of these conversations could shape the region’s approach to security and energy policy for years to come.
Saudi Arabia pursues a path of modernization and economic diversification through Vision 2030. The plan aims to raise the non-oil share of exports and energy activity, expanding private sector participation to boost GDP and reduce the economy’s exposure to oil markets. While oil reserves are projected to last for decades, the broader strategy hinges on strengthening institutions, expanding non-oil industries, and creating a more resilient economy that can thrive even as global energy dynamics evolve. As the kingdom moves forward, questions about the welfare of its 35 million residents and the pace of reform continue to shape both domestic policy and regional diplomacy.