MENA Strategic Bulletin

Sectarian violence and killings surge in Syria, drawing Israel in

Syria has seen a notable increase in sectarian violence, with over 100 fatalities reported in the week starting April 29, doubling the previous week’s toll. The violence was triggered by clashes between Druze and Sunni militants in Jaramana, just outside Damascus, reportedly sparked by a voice recording perceived as blasphemous.

Clashes quickly spread to nearby Sahnaya, drawing Israeli military intervention. Israel confirmed a drone strike on what it called an “extremist group” targeting Druze civilians, marking the first official Israeli strike in defence of Syrian Druze since the fall of Bashar Al Assad. This was followed on Friday morning by a second strike, this time near the presidential palace in Damascus.

Syrian Foreign Minister Asaad Al Shaibani condemned the Israeli intervention, writing on X that “any call for external intervention, under any pretext or slogan, only leads to further deterioration and division.”

Stakeholder and regional impact

Israel’s intervention is not an isolated incident; it reflects a growing trend of direct involvement in Syrian affairs. Since Assad’s ousting in December, Israel has established a buffer zone, targeted Syrian military assets with airstrikes and taken control of once-demilitarised zones near the Golan Heights. The Israeli government has also issued repeated pledges to defend the Syrian Druze since the accession to power of Hay’at Tahrir al-Sham (HTS) in Syria.

HTS leadership and Druze militias are at odds over military disarmament, with Damascus demanding a monopoly on arms and Druze militias rejecting this call, citing ongoing threats and the government’s inability to protect them.

The resulting instability undermines ongoing efforts by Damascus to stabilise its economy and re-enter the diplomatic fold regionally and further afield. President Ahmed Al Sharaa has publicly expressed willingness to normalise ties with Israel “under the right conditions”, including sanctions relief and recognition of Syrian sovereignty.

While progress has been made, notably with the re-opening of the IMF Syria mission and softening EU and UK positions, this escalation in violence, combined with increased Israeli intervention, threatens both internal cohesion and external investment confidence.

What’s next?

The recent surge in violence and foreign military involvement risks stalling Syria’s fragile steps towards economic recovery. The prospect of Israel forming de facto alliances with Druze militias or occupying further Syrian territory could provoke wider regional consequences, including sanctions realignment. If Damascus fails to contain sectarian violence and limit conflict with Israel, its case for Syria as a sovereign, stable state will weaken, thereby jeopardising the possibility of sanctions relief and investor re-engagement.

Simultaneously, the window for diplomacy may narrow or shift. Syria’s stated openness to normalising ties with Israel suggests potential realignment, but further interventions risk making this untenable, especially if they are to appease domestic factions and maintain the support of key allies like Qatar and Turkey.

Lebanese president Aoun visits Abu Dhabi

Following a high-level visit by Lebanese President Joseph Aoun to the UAE, Abu Dhabi announced the lifting of its three-year travel ban on Lebanon, a significant diplomatic breakthrough that signals a potential shift in Lebanese relations with Gulf states. The ban, initially imposed in 2021 in solidarity with Saudi Arabia after a Lebanese minister criticised Riyadh’s intervention in Yemen, had strained ties and restricted movement between the two countries. Hezbollah’s previous influence in Lebanese politics was also a factor that hindered UAE–Lebanon bilateral relations, but the group’s recent diminishment has appeased these concerns.

This development marks a new chapter in UAE-Lebanon relations, with the announcement coinciding with plans by the Abu Dhabi Fund for Development to send a delegation to Lebanon to evaluate joint infrastructure projects. The restoration of travel comes as part of broader efforts by President Aoun to restore ties with the Gulf, following similar overtures to Saudi Arabia earlier this year.

Stakeholder and regional impact

The thawing of UAE-Lebanon relations signals a broader recalibration of Gulf policies towards Lebanon. For the UAE, it offers a strategic point of re-entry into a country with untapped economic potential, especially in its energy and infrastructure sectors.

Lebanon, for its part, is eager to regain Gulf trust. President Aoun’s stated goals from the UAE trip include garnering support for the Lebanese Armed Forces, encouraging Emirati investment, developing gas fields in the eastern Mediterranean and securing broader regional backing for economic reforms and sovereignty. Aoun’s case for renewed UAE–Lebanon dialogue has been made more compelling by his actions on the disarmament of Hezbollah.

What’s next?

The lifting of the UAE travel ban is only the first step. President Aoun has secured verbal commitments for investment, but implementation will depend on Lebanon’s ability to enact economic reforms and restore governance credibility. The arrival of the Abu Dhabi Fund for Development delegation will be an early indicator of how serious both sides are about delivering results.

Gas exploration in the eastern Mediterranean, one of Lebanon’s few strategic assets, remains a priority. Aoun has already appealed to Qatari and French leaders to help restart stalled development. However, Israel’s repeated violations of the ceasefire and its ongoing occupation of disputed southern Lebanese territories complicate progress and dampen investor confidence.

A partnership with the UAE could play an instrumental role in applying diplomatic pressure to secure Israel’s withdrawal from southern Lebanese territories. Their engagement will also be critical in holding Israel accountable to the fragile ceasefire.

IMF slashes MENA regional growth forecast

The IMF has cut its 2025 growth forecast for the MENA region from 4% to 2.6%. This sharp downgrade is driven by rising global trade barriers, extended oil production cuts and conflict instabilities. Oil prices are expected to remain subdued, averaging $65–69 per barrel, leaving energy exporters exposed. The IMF also noted that trade fragmentation and geopolitical shocks are softening economic activity across both oil-exporting and oil-importing countries.

Stakeholder and regional impact

GCC
GCC economies – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE – are projected to grow at 3% in 2025, revised down from 4.2%. The downgrade is primarily due to extended OPEC+ production cuts, underscoring the urgency of accelerating diversification efforts. On this point, Saudi Arabia’s 2024 Vision 2030 progress report highlights tangible gains, including stronger labour market participation, rising industrial output and a continued decline in unemployment. S&P Global Ratings also reports that Saudi banks remain well-positioned to absorb the rising external debt occasioned by the growing financing needs of Vision 2030.

US President Donald Trump has already begun securing investment deals in the Gulf ahead of his mid-May MENA trip, with these inflows expected to play a crucial role in supporting development and diversification projects in Saudi Arabia, the UAE and the GCC more generally.

Oil-importing countries
Forecasts for oil-importing nations have also been downgraded from 3.6% to 3.4%. The IMF flags Egypt (3.8%) and Jordan (2.6%) as being weighed down by delayed reforms and financing gaps. These countries are struggling, as high borrowing costs and reduced foreign aid threaten to further increase inflation and derail growth.

What’s next?

Oil prices will continue to trend downward amid extended OPEC+ production cuts, and Gulf economies appear unlikely to fully offset this deficit in the short term due to structural reliance on hydrocarbon revenues. However, recent progress under Saudi Arabia’s Vision 2030, particularly in labour participation, industrial diversification and private sector job creation, demonstrates that with sustained political will and strategic investment, economic transformation is possible. Declining growth figures increase the urgency for others in the region to follow through with similar conviction.