Where Do the Israel-Hamas Ceasefire Talks Stand?

The latest round of ceasefire talks between Israel and Hamas are set to resume, with an Israeli negotiating team currently heading to Egypt. The talks, which began last week, will involve discussions with Egyptian and Qatari mediators, as well as US officials. The focus of the negotiations will be the status of the Philadelphi corridor and the Rafah land crossing along the Gaza-Egypt border. 

Breakdown in talks: This latest round of talks comes after the previous ceasefire negotiations failed to reach a breakthrough. The previous set of talks ended during US Secretary of State Antony Blinken’s visit to Israel and Egypt, when he claimed that Israel had accepted a “bridging proposal”, and that the onus was now on Hamas. 

The main obstacle holding up a ceasefire agreement appears to be the question of what would happen in Gaza after a truce is established – a scenario being referred to as “the day after.” This issue, particularly around the control of the Philadelphi corridor, has been the primary stumbling block in the most recent round of negotiations, according to Israeli officials. Hamas and other Palestinian groups have accused the US of “buying time”, siding with Netanyahu’s position and not pressuring him to end the war. 

What’s next? The ongoing tensions between Israel and other regional actors such as Hezbollah and Islamic Jihad are also at play, presenting a risk of undermining the progress of a ceasefire. This week has seen continued violence, including Hezbollah’s attack in the Golan Heights and a suicide bomb attack by Islamic Jihad in Tel Aviv. 

The ongoing violence has taken a heavy toll on the population of Gaza, with Israel bombing of UNRWA schools sheltering civilians, including children. Most of Gaza’s population have been confined to an area of 39 sq km and face shortages of food, medical supplies and the spread of diseases like polio and hepatitis-B, with the first polio paralysis case recorded on August 23. UNICEF and the WHO called for a seven-day humanitarian pause this week to allow for the administration of polio vaccines.  

Israel-Hezbollah: The Current Situation 

Hezbollah launched more than 50 rockets into Israel on August 21, hitting residential areas in Israeli-annexed Golan Heights, adding to tensions surrounding the pivotal ceasefire discussions. 

 Meanwhile, Israel killed a senior member of the Palestinian Fatah movement, Khalil al-Maqdah, in a strike on his car in the southern Lebanese city of Sidon on August 21. The Israeli military accused al-Maqdah of orchestrating attacks in the West Bank.  

Regional and stakeholder impact: The attack marks the first such reported strike by Israel on a senior Fatah figure in over 10 months of cross-border clashes between Israel and Lebanon’s Hezbollah following the Gaza conflict. Fatah, which controls the Palestinian Authority in the West Bank, has not announced any attacks on Israel from Lebanon since the clashes began. 

What’s next? In response to the killing, Fatah accused Israel of seeking to “ignite a regional war” with the assassination. The situation remains tense, with potential for further escalation between the various parties involved in the region. This risks jeopardizing ceasefire efforts and adds to pre-existing tensions across the Lebanon-Israel border. 

Iran’s new foreign minister calls for EU dialogue 

Iran’s new foreign minister, Abbas Araghchi, has called for dialogue with the European Union to resolve bilateral issues. Araghchi stated that the Islamic Republic of Iran welcomes the development of relations with the European Union in an environment based on mutual respect. This comes during the forming of a new, reformist Iranian government against the backdrop of a destabilised Middle East and tense EU-Iran relations. 

Regional and stakeholder impact: The EU accuses Iran of failing to rein in its nuclear activity, providing support to Palestinian militant group Hamas, backing Russia’s war in Ukraine and committing human rights violations. Araghchi acknowledged that the development of relations requires dialogue to resolve issues between the two parties and the correction of the misguided policies of European countries. This indicates a desire from Iran to improve relations with the EU, which could have significant regional implications and increase pressure to reform policies in Iran.

What’s next? EU foreign policy chief Josep Borrell discussed prospects for renewed engagement on all files of mutual interest with Iran, including the need for it to exercise de-escalation and restraint, halt military cooperation with Russia against Ukraine and seek nuclear non-proliferation. Borrell stated that such dialogue is essential to defusing regional tensions. The future of Iran-EU relations remains uncertain, as efforts to revive the 2015 nuclear deal have so far failed. However, Araghchi’s calls for dialogue with the West suggest a potential path towards rebuilding ties. Iran is expected to use its position of withheld retaliation against Israel as leverage to advance talks and cooperation with the EU.

Algeria sends fuel to help Lebanon overcome blackouts 

An Algerian oil tanker set sail for Lebanon on Thursday as part of an effort to help Beirut with its chronic power issues. The first shipment of 30,000 tonnes of fuel oil from state-owned Sonatrach will depart for Lebanon as an emergency shipment. This comes after Lebanon’s state power company Électricité du Liban announced a complete power outage on August 17, including at critical facilities like Beirut’s Rafic Hariri International Airport. 

Regional and stakeholder impact: The Algerian fuel donation provides a temporary solution to Lebanon’s electricity crisis, which has been exacerbated by the country’s ongoing economic troubles. However, this aid is not a long-term fix, as Lebanon continues to struggle with its ability to pay for essential fuel imports due to the collapse of the Lebanese pound. Iraq had previously committed to delivering fuel to Lebanon, but that deal has faced delays due to technical and logistical issues, as well as Lebanon’s inability to fulfil its financial obligations, with the Lebanese Central Bank failing to approve a new $700 million credit line required to fulfil Lebanon’s obligations under the deal. 

What’s next? Details about the Algerian fuel shipment are still being finalised. Once the shipment arrives it will offer short-term relief, but Lebanon is still in need of a more sustainable solution to address its long-standing power crisis. The US-backed plan to transport Egyptian gas and Jordanian electricity to Lebanon via Syria has stalled due to US sanctions on Syria, leaving Lebanon with limited options. Going forward, Lebanon will need to secure additional international assistance or make structural reforms to its electricity sector if it is to provide reliable power to its citizens. 

Saudi Arabia’s profits from oil exports plunge as Kingdom tightens purse strings 

Saudi Arabia’s revenue from oil exports has plummeted to a three-year low, reaching $17.7 billion in June 2024. This represents a 9% decrease compared to the same time last year, and a 12% decrease from May 2024. According to government data, Saudi Arabia exported about 5.6 million barrels of oil per day in June, only 250,000 more than during the first months of the COVID-19 pandemic when global travel and oil demand crashed. 

Regional and stakeholder impact: The drop in oil revenue will be keenly felt in Saudi Arabia, where government purse strings have been tightened to raise funds for Crown Prince Mohammed bin Salman’s planned mega-projects under the “Vision 2030” economic and social reforms. The IMF estimates that Saudi Arabia would need an oil price of $96.20 per barrel to balance its 2024 budget and finance its megaprojects. However, Brent crude is currently hovering at around $76 per barrel, roughly 7% less than its trading price at the same time last year. As a result, Saudi Arabia has had to scale back its $1.5 trillion Neom megacity project. Instead of 1.5 million people living in the city by 2030, officials now anticipate fewer than 300,000 residents, and only 2.4km of the planned 170km city is set to be completed by 2030. 

What’s next? The figures put the focus back on Saudi Arabia’s energy policies, as the kingdom has been the main force behind a push within OPEC+ to cut oil production so as to support prices. With both oil revenue and foreign investment failing to meet expectations, Riyadh is being forced to downsize its ambitious mega-projects under the Vision 2030 programme, which was designed to diversify the kingdom’s economy and open up its conservative society to Western tourism and business.